Bitcoin Dips Under $120K Before Quick Comeback as BNB Slides Out of Top Three

• Bitcoin briefly dropped below $120,000 before rebounding, while BNB slipped from the top three rankings.
• Institutional withdrawals and Fed uncertainty drove short-term caution, but traders still showed strong buying support.

Bitcoin dropped briefly under $120,000 before bouncing back above that threshold, while BNB lost its spot among the top three cryptocurrencies by market capitalization, overtaken by Tether. 

After reaching as high as $126,000 earlier in the week, Bitcoin’s value slipped to near $119,700, prompting concern among traders. The dip did not last long, as buying pressure pushed it back above $120,500 within hours.

During the short downturn, trading activity grew sharply as buyers entered to take advantage of lower prices. The rebound brought the value back to about $121,276, showing solid demand near that level.

Meanwhile, BNB is trading around $1,248.42, down 2.14% in the past 24 hours.

Bitcoin ETF Outflows Reflect Weak Institutional Sentiment

Profit-taking appeared to have played a key role in the recent market drop. Many holders began selling after Bitcoin’s rally to record highs around $126,000. The urge to secure profits created heavy short-term selling pressure on spot markets and temporarily weakened sentiment.

Grayscale saw $45.5 million in net outflows in a single day, while Fidelity and ARK Invest recorded withdrawals of $13.2 million and $5.6 million, respectively. This marks a sharp shift from recent days when Bitcoin exchange-traded funds were pulling in hundreds of millions of dollars in daily inflows.

Bitcoin ETFs, often seen as a gauge of traditional investor sentiment, have shifted from consistent inflows to significant outflows. Analysts say this move reflects caution rather than panic selling.

Fed Uncertainty Adds Pressure

The global macro backdrop continues to weigh on digital assets. The Federal Reserve’s next interest rate decision, expected at the end of October, is creating uncertainty. Market participants are waiting for new comments from Chair Jerome Powell and other officials for clues on the path of rate cuts.

The ongoing partial shutdown of the U.S. government has increased caution in financial markets. Investors tend to shy away from risk during political tension, and that has amplified bearish pressure on crypto assets. Rising inflation expectations have also dimmed hopes for near-term easing by the Fed.

Alex Kuptsikevich, FxPro senior analyst, recently said, 

CryptoQuant analysts stated that “selling pressure in the derivatives market has eased compared to last month,” and added, “If ETF net inflows continue, the short-term correction can be seen as a process of reconfirming buying demand.”

That perspective aligns with the recent rebound, suggesting that traders remain confident in long-term support levels despite near-term turbulence.