Bitcoin Price News: BTC Briefly Dropped Below $100K But Recovered – Is The Worst Over?

Bitcoin (BTC) has shed nearly 18% of its value in the past 30 days as President Donald Trump’s tariff increase on China, paired with the Fed’s hawkish comments, have derailed the crypto market.

The top crypto dropped sharply during 6 of the 9 past daily sessions, moving from $115,000 to $99,000 as of yesterday, as billions of dollars in long positions were being flushed out.

Data from CoinGlass shows that long liquidations surpassed $2.7 billion in the past couple of days, as a move below $110,000 seems to have triggered a cascade of forced sales.

These numbers are big compared to the past 6 months, and yesterday’s liquidations qualify among the top 5 daily wipe-outs that have occurred during this period.

The market has been shaken up by comments from the head of the Federal Reserve, Jerome Powell, who questioned the odds of a rate cut in December. Prior to his remarks, it was the market’s baseline scenario that another 25 basis points cut would take place by then.

Open Interest Drops Sharply and ETF Outflows Accelerate

Open interest in BTC futures has declined sharply. If expressed in BTC, which helps offset the impact of price swings, traders’ exposure has dropped by 10% since the top crypto peaked on October 10.

Open Interest in BTC Futures – Source: CoinGlass

This reduced participation will make it more difficult for BTC to make it back to those highs. Hence, the first sign of a recovery would be an increase in OI, at least above 700,000 BTC.

Meanwhile, net outflows to Bitcoin-linked exchange-traded funds (ETFs) reflect that the market is starting to panic. According to data from Farside Investors, participants have been pulling money out of these vehicles for 5 days in a row.

In total, $1.9 billion have been withdrawn from Bitcoin ETFs during the latest wave of selling, meaning a 3% retreat in the combined assets managed by these funds.

When The Market Panics, BTC Tends to Recover

Crypto’s Fear and Greed Index – Source: CoinMarketCap

Market sentiment has hit extreme lows. The Fear and Greed Index just hit 20 for the first time since April. Back then, BTC bottomed at around $82,000. When the market hits the panic button and the F&G index hits such lows, it typically means a contrarian signal.

Hence, we could expect a recovery soon. However, now that BTC is starting at a much higher floor ($100K instead of $82K), we could expect that the next leg up will push the top crypto to a new all-time high.

Looking at the daily chart, we can see that the price recovered rapidly two times after it dropped below the $100,000 mark. This means that buying interest at that level remains quite strong. Trading volumes yesterday exceeded the 14-day moving average by 2.85 times as BTC touched what could be considered a highly contested area for both bulls and bears.

BTC/USD Daily Chart (Bitstamp) – Source: TradingView

The stage looks set for a retest of $108,000 from below. This means an 8% upside potential in the near-term for speculators. However, BTC is now trading below the 200-day exponential moving average (EMA) for the first time since April as well.

Back then, it stood below this line for around one month. Hence, BTC may not be out of the woods yet, and it could keep dropping. However, if it manages to stay above $100,000, the worst of this pullback may be over already.

In the meantime, check out our educational section if you want to get a better understanding of how crypto markets work.