Bitcoin’s meteoric summer rise has come to a halt, with the cryptocurrency giving back all the gains it accumulated during Wall Street’s bullish wave and
heightened institutional demand. The digital asset plunged as much as 7.4 per cent to $96,794 in New York on Tuesday, marking its first dip below $100,000 since June, according to a Bloomberg report. The drop represents a fall of more than 20 per cent from its record high just a month ago, a correction that mirrors bear market conditions in global equities, states the report. Ether followed suit, slipping as much as 15 per cent, while several alternative cryptocurrencies, or altcoins, suffered even deeper declines. As per the report, many of these less liquid tokens have now lost over 50 per cent of their value this year, underscoring the widespread fragility in the digital asset space. Vikram Subburaj, CEO, Giottus.com, noted, "Bitcoin fell under $100,000 for the first time since June to extend a month-long downtrend that has erased over 20 per cent from October’s peak. Selling pressure quickened as ETF outflows and long-term holder distributions met thin weekend liquidity. On-chain trends point to older coins moving to exchanges even while derivatives positioning remains light. This is a mix that suggests the latest leg lower is being driven more by spot flows than leverage. Near-term focus is on the $95,000–$98,000 band, where prior demand clusters and realised-price levels converge. Traders are watching whether that zone can arrest the slide and stabilise momentum." "Macro conditions remain unsupportive. The US Fed’s cautious stance on further rate cuts has dampened risk appetite. Equities and commodities are also turning lower. Liquidity indicators continue to contract, and down-day correlations between Bitcoin and major indices have tightened. Institutional demand via ETFs has softened with five straight sessions of net outflows. Despite this, funding rates and open-interest signals point to limited forced liquidations. Net-net, the tape suggests a controlled correction rather than full capitulation, with underlying market structure largely intact despite weaker breadth," he added. October’s Liquidation Shock Still Haunts The Market The sharp reversal began in October, when a brutal liquidation wave wiped billions from leveraged long positions, forcing traders to exit en masse. Since that collapse, many have chosen to stay out of the market altogether, noted the report. Open interest in Bitcoin futures remains well below pre-crash levels, and despite favourable funding conditions, enthusiasm for re-entry has been limited. “Bitcoin’s decline to the June lows reflects a market structure still grappling with the psychological overhang from October’s massive liquidation event, which has fundamentally altered how participants engage with the prevailing downtrend,” said Chris Newhouse, director of research at Ergonia, a decentralised finance research firm. The current selloff has been relatively subdued, with total liquidations across both long and short positions amounting to around $1 billion, according to Coinglass data, a sharp contrast to the staggering $19 billion erased on October 10, claims the Bloomberg report. "Altcoins followed Bitcoin lower but continued to trade in a more orderly fashion. Ether slipped below $3,300, down roughly 10 per cent on the day and about 18 per cent for the week. This was the effect of traders reducing exposure to DeFi-related assets and rotating into cash. Solana, XRP, and BNB saw 6-8 per cent dips, reflecting broader risk aversion rather than token-specific developments. Volumes remain moderate to suggest that much of the leverage has already been flushed out. From a structural view, this phase looks more like consolidation than capitulation. Positioning is cleaner, funding has normalised, and valuations are beginning to reset to levels that historically attract institutional inflows," said Subburaj. Market Sentiment And Technical Headwinds Deepen Options traders have shifted to a defensive stance, building strong hedges against further downside. As per the report, Data from Deribit, a Coinbase-owned exchange, shows that put options with a strike price of $80,000 expiring in late November have seen the most interest. Bitcoin’s trajectory is also closely mirroring that of tech stocks, with high-profile names like Nvidia and Palantir slipping amid renewed scepticism over stretched valuations. The correlation reinforces Bitcoin’s reputation as a proxy for speculative risk appetite rather than a reliable hedge, added the report. The token managed to recover slightly in early Asian trading on Wednesday, rising 1.6 per cent to $101,130 as of 8:27 am in Singapore, with other major cryptocurrencies also trimming some losses, states the report. ETF Outflows And Weak Demand Add To Pressure Investor sentiment remains fragile amid outflows from Bitcoin and Ether ETFs, reflecting waning enthusiasm after strong inflows earlier in the year. The ongoing withdrawals from exchange-traded funds, coupled with potential selling from digital-asset treasury firms, are weighing further on prices, according to the report. “While the longer-term directional bias remains clearly bearish, the severity of October’s liquidations has prevented traders from maintaining sustained short positions with conviction, resulting in a market dominated by tactical, short-term momentum trades rather than committed directional exposure,” added Newhouse, the report states.
