Bitcoin's price dropped from over $126,000 to $122,000 amid volatility, driven by market overheating and a surging US dollar on October 8, 2025.
The event underscores potential risks for crypto market momentum, with derivatives and ETF inflows prompting institutional caution, affecting Bitcoin and major altcoins.
Bitcoin Retreats to $122,000 Amid Dollar Surge
Bitcoin’s price recently pulled back from record highs above $126,000, falling to $122,000. Analysts attribute the decline to market overheating and a surging US dollar affecting crypto momentum. This comes amid a highly volatile rally.
Key market participants, such as Jean-David Péquignot from Deribit, have suggested further falls within the $118,000–$120,000 zone. Meanwhile, Vetle Lunde of K33 emphasized a spike in BTC accumulation via ETFs and derivatives, indicating potential market overheating.
"BTC could revisit the $118,000–$120,000 zone shaking out traders who missed the lows and joined the rally late. If that pullback happens... would offer a buying opportunity as technicals and the macro environment align for BTC to run higher above $130,000 through the last quarter of the year." - Jean-David Péquignot, Chief Commercial Officer, Deribit
Altcoins Plummet as Bitcoin Price Falls Sharply
Bitcoin's sharp price dip also affected major altcoins like XRP, DOGE, and ADA, which saw drawdowns of 4%-5%. The market experienced increased volatility, with order books showing significant trading as rates fluctuated.
Financial impacts are notable, with ETF and derivatives seeing over 63,000 BTC inflows, suggesting strong institutional positioning. However, analysts anticipate short-term consolidation, following historical patterns of reversals post new highs.
Overheated Market Signals Risk of Consolidation
Similar past Bitcoin highs have been succeeded by sharp pullbacks, such as the January rally and July rise above $123,000. These events illustrate consistent patterns in market behavior after record points.
Experts from Deribit and K33 suggest a likely overheated market due to extensive institutional inflows. They highlight historical links between exposure bursts and local tops, pointing to a short-term consolidation risk.
"Historically, similar bursts in exposure have often coincided with local tops, and the current setup suggests a temporarily overheated market with elevated risk of short-term consolidation." - Vetle Lunde, Head of Research, K33 Research