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ToggleBitcoin's drop below $113,000 reflects a combination of macro concerns, legal risks, and shaken confidence in corporate growth through AI. However, despite volatility, historical patterns suggest the long-term price appreciation trend may not have ended.
Key Points to Understand:
- Options Market Signals Extreme Fear: BTC's 30-day option delta skew increased to 12%, the highest in 4 months, indicating rising risk hedging demand. Historically, such spikes often signal a strong subsequent recovery.
- Macro Pressure: US import tariffs, concerns about Fed credibility, and weak stocks are weighing on investor sentiment.
- SEC Investigation & AI Disappointment: News of SEC investigating Alt5 Sigma related to Trump's World Liberty Financial, along with a report showing AI not delivering significant revenue growth, triggered a sell-off.
- $112K Support Zone: BTC fell from its historic high of $124,176 to $112,942, liquidating over $113 million in long positions. The $112,000 - $113,000 zone now serves as a critical support.
SEC Investigation and AI Impact
The sell-off accelerated after reports of SEC investigating stock fraud and manipulation at Alt5 Sigma, a company linked to Trump's World Liberty Financial. The project raised $550 million through token sale, with Trump publicly earning over $57 million and Eric Trump expected to join Alt5 Sigma's board.
Simultaneously, market risk appetite declined after an MIT NANDA research report showed 95% of enterprise AI projects did not generate significant revenue growth. Nasdaq 100 dropped 1.5%, further pressuring Crypto.
Trade Taxes and FED Concerns
Another factor causing investor concern is the US imposing a 50% import tariff on 407 items containing aluminum and steel. These items include familiar products like automotive components, plastics, and specialized chemicals. This has economists worried about supply chain disruption and rising consumer prices.
According to CNBC, UBS investment bank raised its gold price forecast to $3,700 by September 2026. UBS strategy experts believe gold will rise due to three factors: slowing US economic growth, Federal Reserve (Fed) monetary policy loosening, and a weakening USD. Additionally, concerns about US budget deficit and doubts about Fed's independence also contribute to gold's rising prospects.
Amid growing concerns about economic recession and potential impacts on companies related to Trump's World Liberty Financial, demand for price decline hedging has sharply increased in the Bitcoin derivatives market. The BTC options skew index shifted to a downward state from Friday and continued to worsen, reflecting high investor caution.
Bitcoin's 30-day put-call delta skew index surged to 12%, the highest in over four months. Under normal conditions, this index typically fluctuates between -6% and +6%, indicating balanced pricing of call and put options. When the index exceeds 10%, it signals extreme market fear, though such conditions rarely persist.
The most recent delta skew index spike to 13% was on April 7th, when Bitcoin fell below $74,500, its lowest in five months. Risk-tolerant investors at that time earned up to 40% profit in just one month, as Bitcoin rose to $104,150 on May 8th.
There's currently no evidence suggesting Bitcoin's bull run has ended. Trader fears are often exaggerated compared to reality. Bitcoin might even benefit from capital flowing out of the stock market, indicating current volatility hasn't altered its long-term price appreciation trend.
Conclusion: If Bitcoin maintains above $112,000, the price appreciation structure remains intact, but if it breaks this level, the possibility of price retesting the $105,000 - $110,000 zone will be triggered.
