Bitcoin price falls below $100,000, causing traders to feel extreme fear.
Bitcoin experienced a significant drop below $100,000 on two occasions on Tuesday, marking its lowest point since June and instilling a sense of profound unease among investors. Nic Puckrin, who serves as a co-founder of Coin Bureau, described the prevailing sentiment among traders as akin to “an almost biblical level of dread.” In the midst of this decline, data from CoinGlass revealed that total crypto liquidations had reached a staggering $1.6 billion over the course of the past 24 hours.
Adding to the prevailing atmosphere of apprehension is CoinMarketCap’s Fear and Greed Index plummeting to a mere 20, its lowest reading since April and hovering on the brink of “extreme fear.” This raises the pressing question of what lies ahead for Bitcoin. Although the digital currency saw a slight recovery on Wednesday, it remains down by double digits from its peak on October 6. Moreover, Bitcoin ETFs have witnessed significant outflows this week, amounting to a total of $763 million, according to SoSoValue.
Insights from Citi analysts shed light on the reasons behind Bitcoin’s downturn. They pointed to a variety of factors, such as weakening ETF demand and disrupted flows, which they identified as pivotal areas requiring close monitoring. Additionally, they highlighted the technical stasis affecting Bitcoin’s performance, noting that it is currently trading below its 200-day moving average, potentially stifling demand for the digital asset.
Analysts at CryptoQuant echoed similar views by emphasizing in a report the breach of a crucial support level by Bitcoin, signaling a resemblance to a past bear market. They specifically highlighted Bitcoin falling below its 365-day moving average of $102,000, a pivotal technical indicator with both strategic and psychological implications. The report warned that failing to swiftly surpass this moving average could trigger a more substantial correction in Bitcoin’s price.
Factors such as macroeconomic conditions, an extended period of shutdown, and apprehensions surrounding digital asset treasuries also pose additional risks that could dampen risk appetite and further drive Bitcoin’s price down. Timothy Misir, head of research at Blockhead Research Network, cautioned that a failure to maintain the $98,000 support level could signify a shift towards a bear market, with a drop below $95,000 potentially leading to widespread panic.
Despite these challenges, some analysts retain an optimistic outlook, suggesting that while November may prove to be tumultuous for Bitcoin, the broader bull run remains intact. Puckrin expressed confidence in the digital currency’s long-term prospects, envisioning $150,000 as a probable peak for this cycle. Emphasizing the resilience of Bitcoin’s fundamental factors, he anticipated that market volatility would eventually subside, and the price would recover as planned developments unfold.
