The cryptocurrency market saw a sharp decline as Bitcoin prices fell below $103,700, marking the lowest price since recent months. This downturn emerged amid significant liquidation across the market, affecting many investors.
Recent reports indicated that over $1.27 billion in leveraged positions were liquidated within a single day. Notably, nearly 90% of these liquidations came from traders holding long positions. This decline was exacerbated when Bitcoin dropped below its critical 200-day moving average, which had been a solid support level for an extended period.
The sudden drop in Bitcoin triggered a wave of panic among investors, pushing the Crypto Fear & Greed Index to 21, representing a state of “extreme fear” in the market. Other cryptocurrencies also experienced significant declines, including Ethereum (ETH), which fell by 6% to around $3,500.
Experts have linked the price downturn to growing uncertainty surrounding Federal Reserve policies. Remarks from Chair Jerome Powell suggested a reduced likelihood of a rate cut, leading to an increase in Treasury yields, which in turn diminished investor interest in high-risk assets like Bitcoin.
Pressure from ETF Redemptions and Whale Movements
The situation worsened as Bitcoin ETFs faced substantial redemptions, amounting to $186.5 million on Monday—the highest outflow seen since early 2024.
Recent analysis revealed that BlackRock’s iShares Bitcoin Trust (IBIT) played a significant role in these outflows, while other prominent funds like Fidelity’s FBTC and ARK 21Shares’ ARKB showed stable activity.
This surge in ETF withdrawals coincided with increased whale activity in the market. Reports indicated that long-term holders had offloaded over 400,000 BTC, approximately 2% of the total supply, to exchanges in the past month.
Among these, a notable investor transferred 13,000 BTC (valued at around $1.4 billion) since October, while another large holder deposited over 3,200 BTC on Kraken. Analysts suggest that these transactions indicate heightened profit-taking and wavering confidence among long-term holders.
Although self-custody on exchanges like Binance is rising, on-chain metrics from CryptoQuant suggest that buying momentum remains weak, indicating that accumulation may not be sufficient to reverse the current market trend.
Focus on $100K Support: A Crucial Level for Bitcoin
As the Bitcoin price hovers around critical technical levels, analysts believe a retest of the $100,000 mark is imminent. A breach below this psychological barrier could lead to further losses, potentially stretching down to $77,000, which aligns with the 61.8% Fibonacci retracement level and April 2025 lows.
Despite the bearish outlook from some quarters, a few market strategists argue that the long-term bullish trend may still be intact. Joel Kruger from LMAX stated that historical corrections have often been followed by renewed accumulation near the 50-week moving average. He noted that this current downturn, while painful, fits into Bitcoin’s broader cyclical behavior.
As fear spreads through the market and ETF flows continue to reflect negativity, Bitcoin’s ability to maintain the $100K support could potentially dictate whether the current phase is merely a correction or signals a deeper downturn.
Cover image from ChatGPT, BTCUSD chart from Tradingview
