After a 20% plunge, Bitcoin’s next drop could be even harsher

The week has been brutal. Bitcoin slipped under $100,000, hitting its lowest level in six months, and traders are now anxiously watching the chart like it’s a crime scene.

As of press time, the OG crypto is 20% below its all-time high of $126,000, according to data from CoinGecko, after a major liquidation event on October 10 triggered additional downside pressure as leveraged crypto positions were forced out, as was reported by Cryptopolitan.

Bitcoin first plunged under $117,000, then pushed through the $112,000 level. After those breaks, the price failed to regain either support region. The inability to reclaim those points has been viewed as a sign of weakening market confidence.

Bear market sings are deepening after new buyers backed away

Markus Thielen, founder and CEO of 10X Research in Singapore, said on Friday that the price action indicates that the market has shifted into a bear phase.

“We haven’t really reclaimed this level since then, and I think that’s a sign we are, unfortunately, in a bear market,” Markus said.

His company had already predicted last month that the OG crypto could fall to $100,000, and now expects the market may still be “a few weeks away” from reaching a bottom. Markus added, “I think there’s this brief risk where we could correct quite a bit more.”

10X Research pointed out that the marginal buyer is no longer active. The investors who entered when prices were climbing have either exited or are no longer willing to commit funds.

Fund managers with large share exposure through exchange-traded products may also be forced to reduce their holdings as underlying asset prices fall.

The US dollar has found fresh strength, which may place more pressure on crypto. Markus said, “There’s this air pocket below $93,000, and there is not much support. It could be that there is going to be some liquidation that brings us to potentially the $70,000 level.”

Markus also added that early adopters have often sold near peak points in past cycles before re-entering later once the market stabilizes.

Liquidity factors and shifting investor behavior

Some analysts say there are possible drivers that could help lift the price. These include the potential for a Federal Reserve rate cut in December, as well as speculation regarding upcoming changes at the central bank when Jerome Powell’s term expires in May.

There is also discussion around the expected reopening of the US government, which could send more liquidity into markets.

Sean Farrell, head of crypto at Fundstrat, said in a video that the shutdown has been “stifling liquidity conditions” and increasing concern about broader economic momentum.

JPMorgan said in a note that the deleveraging event that pushed the coin down in October may now be behind the market.

Nikolaos Panigirtzoglou, managing director at JPMorgan, said that a recent rise in gold volatility has made Bitcoin relatively more appealing to some investors, which he believes could lead to “significant upside” over the next 6–12 months, with a possible move as high as $170,000.

Yet selling remains visible. Farrell said that whales have been sending large amounts of coins from private wallets to exchanges over recent weeks, “hammering price.”

Engel reiterated that net sales from long-term holders have gone beyond 1 million coins since June. He also noted that retail buying has been weaker than previous cycles and that ETF inflows have slowed.

Engel said that while there may be support above $95,000, there are not many near-term catalysts. He added, “‘Uptober’ failed to materialize for the first time since 2018, which was followed by a 37% decline in November 2018.”

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