Bitcoin’s value fell to its lowest point in the last 50 days, dropping below $108,000. This sharp decline caught investors off guard, triggering the liquidation of leveraged long positions totaling $137 million. The pullback coincided with the Nasdaq 100 Index’s 1.2% drop, as concerns arose over the sustainability of the artificial intelligence sector. Market participants began debating whether Bitcoin’s fall was a reflection of broader macroeconomic pressures or an isolated event specific to the cryptocurrency market.
US Trade Deficit and Soaring Chinese Bad Loans
The United States saw a significant increase in its July trade deficit, which rose by 22% to reach $103.6 billion, fueling investor concerns. The considerable gap between imports and exports led to warnings from economists, indicating that it could severely impact third-quarter growth. Reuters highlighted that this trade deficit might exert serious pressure on economic growth.
Concurrently, filings with the US Securities and Exchange Commission revealed that the largest 200 stock transactions conducted by senior executives last week were entirely sales. A user on platform X, Malone_Wealth, commented on this unprecedented occurrence, noting that insider sales reached a record level.
In China, the five largest banks faced record declines in profit margins, with bad loan ratios rapidly increasing. According to Financial Times, Chinese retail banks disposed of $5.2 billion in non-performing loans in the first quarter of the year, marking an eight-fold increase from the previous year.
AI Stocks Suffer as Nvidia and SMCI Show Weakness
The artificial intelligence sector also showed signs of risk. It was disclosed that 44% of Nvidia’s data center revenue came from just two customers. Although the company’s quarterly results and third-quarter forecasts met expectations, NVDA shares fell by 4.7% within two days.
Meanwhile, Super Micro Computer (SMCI), a key hardware partner of Nvidia, warned of potential risks to financial statements due to weaknesses in financial reporting. The $25 billion company’s shares dropped by 5.1% on Friday.
Furthermore, the sales by long-inactive Bitcoin 
$91,967 whales and miner exits also added pressure. However, the primary factor driving the decline appears to be general macroeconomic weakness. Observations noted that many investors were reducing positions prior to the US national holiday on Monday.
Additionally, significant stock sales by major company executives could reinforce a “peak” perception among investors. These sales reflect both a risk-averse attitude and pessimism about the economic outlook. Furthermore, the decline in value of major companies like Nvidia and SMCI signals increasing doubts about the sustainability of growth in the artificial intelligence sector.
Bitcoin’s drop below $108,000 technically confirms a downtrend. The sales by long-established whales and the depletion of miner reserves could further increase price pressure.
