On Tuesday, Bitcoin experienced significant volatility, falling below the $100,000 mark twice, a stark occurrence not seen since June. This decline has sparked significant concern among investors, described by Nic Puckrin, co-founder of Coin Bureau, as invoking “an almost biblical level of dread.” Data from CoinGlass indicates that total liquidations across the cryptocurrency market reached a staggering $1.6 billion within 24 hours.
Adding to the atmosphere of uncertainty, CoinMarketCap’s Fear and Greed Index plummeted to 20, marking its lowest level since April and suggesting a state of “extreme fear” among market participants. As Bitcoin attempted to recover on Wednesday, it remained down significantly from its all-time high of October 6. Recent data reported by SoSoValue highlighted that Bitcoin exchange-traded funds (ETFs) have seen considerable outflows, totaling approximately $763 million this week alone.
Analysts from Citi attributed Bitcoin’s recent downturn to various factors, including a lack of appetite for ETFs, hindered flows, and what they termed “technical paralysis.” They noted that Bitcoin is currently trading below its 200-day moving average, suggesting that this could further suppress demand for the digital asset. Likewise, analysts from CryptoQuant shared concerns, indicating that Bitcoin has breached its key support level, mirroring the critical conditions seen during the bear market of 2022. They pointed out that the price is now below the crucial 365-day moving average of $102,000, which acts as a key technical and psychological support. This moving average has historically marked significant points in the market cycle, and analysts cautioned that failing to regain this level quickly could result in a larger correction.
Additional risk factors complicating the landscape include macroeconomic concerns, a potential prolonged market shutdown, and worries regarding digital asset treasuries. These elements could further dampen investor sentiment and contribute to a decline in Bitcoin’s price. Timothy Misir, head of research at Blockhead Research Network, warned that a loss of the $98,000 support level could indicate a structural shift toward a bear market, with any dip below $95,000 possibly inciting panic among holders.
Despite the prevailing bearish sentiment, some analysts maintain an optimistic outlook for Bitcoin. While they acknowledge that November is likely to be “choppy,” they argue that the overarching bull run isn’t over yet. Puckrin expressed a long-term price target of $150,000 for this cycle, predicting that while the current sell-off may be unsettling, the fundamentals remain intact. He stated that this volatility will likely continue to challenge traders but believes that the selling pressure from long-term holders and broader economic uncertainties will eventually ease, allowing for a price recovery.
