Bitcoin has recently faced significant downward pressure, prompting analysts to pinpoint $94,000 as a critical support level that could indicate the end of its slump. The leading cryptocurrency has dropped below the $100,000 mark after weeks of hovering around that threshold, coinciding with a broader decline in the digital asset market.
Since October, the global market cap for cryptocurrencies has decreased by over $1 trillion, currently resting at approximately $3.26 trillion. In the last 24 hours alone, BTC has experienced a decline of more than 6%. This downturn is attributed to a combination of factors, including macroeconomic uncertainties, diminishing demand for exchange-traded funds (ETFs), and an overleveraged market.
As bears dominate the market, the reversal in U.S. ETF flows has compounded the selling pressure. Reports indicate that Bitcoin ETFs suffered net outflows exceeding $1.1 billion within a 48-hour period in mid-November. Data from SoSoValue indicates that one Bitcoin ETF recorded a net outflow of $492 million, marking three consecutive days of outflows. In contrast, Grayscale”s Bitcoin Mini-Trust ETF managed to attract around $4.17 million in inflows during this timeframe.
The thinning liquidity in the market has exacerbated the situation, leading to a cascading effect once key support levels were breached. Additionally, concerns surrounding centralized exchanges and notable security breaches in decentralized finance (DeFi) sectors have intensified market fears. The Fear and Greed Index currently reflects “Extreme Fear,” registering at 16 points among investors.
Despite a 14% decline in Bitcoin”s price over the past month, it remains approximately 3% higher on a year-to-date basis. The cryptocurrency briefly touched the $94,000 mark, which analysts suggest is crucial as it encompasses a cluster of long-term holders who had entered positions between six to twelve months ago. Should Bitcoin fall below this range, traders believe the next significant level to watch would be around $85,000, which could prolong the correction into early 2026.
At present, BTC is trading at an average price of $95,830. However, on-chain metrics do not indicate a full-blown “bear market.” The CEO of CryptoQuant, Ki Young Ju, noted that Bitcoin”s Realized Cap continues to reach record highs, suggesting that capital is not fleeing the ecosystem, but rather that coins are shifting into more robust hands. Accumulation wallets have been on the rise during the selloff, a trend observed in previous mid-cycle resets since 2016.
Looking ahead, macroeconomic factors will play a pivotal role in any potential recovery. A general improvement in global liquidity could swiftly rekindle interest in ETF investments. Structural indicators imply that the market may be nearing exhaustion rather than facing a total collapse. The Net Unrealized Profit/Loss (NUPL) metric has drifted toward historical reset levels, and spending among long-term holders has decreased.
Market expectations regarding a December rate cut have also shifted, with only a 40% probability now priced in, a drop from nearly 90% a few weeks prior. Additionally, sentiment among options traders has shifted dramatically, with put options at $85,000 and $90,000 now dominating open interest on Deribit, signaling a change in market outlook. On Friday alone, nearly $1.2 billion in crypto positions were liquidated, with Bitcoin accounting for approximately $344 million of that total.
