Bitcoin extended its slide today as markets remained jittery in the face of mounting macroeconomic pressures and aggressive selling by large holders.

The total crypto market capitalisation shed more than 5% in just 24 hours, dropping close to the $3.6 trillion mark, its lowest level since August.

Sentiment took a sharp hit, with the Crypto Fear and Greed Index plunging over six points into the “extreme fear” zone at 22. The last time it sank this low was back in April.

Altcoins were hit even harder. All of the top 100 cryptocurrencies were in the red, with losses spreading across the board.

Why is Bitcoin price going down?

Bitcoin price hit a four-month low of $103,856 today as a fresh wave of panic gripped financial markets. 

Concerns over the health of regional US banks resurfaced after two notable bankruptcies in the auto sector triggered fears of wider contagion. 

First Brands Group, an Ohio-based auto parts supplier saddled with $10 billion in liabilities, and Tricolor Holdings, a subprime auto lender with $1 billion in debt, both filed for bankruptcy in late September. 

These collapses revealed vulnerabilities in private credit markets and shone a spotlight on risky lending practices.

Zions Bank saw its stock drop 13% after revealing a $50 million loss tied to its California loan book, while Western Alliance fell 11% following a lawsuit it filed over alleged fraud involving Cantor Group V, LLC. 

These stress signals from the regional banking sector spilled into broader equity markets, with the S&P 500, Nasdaq, and Dow all finishing the day lower on Thursday. 

As risk-off sentiment deepened, Bitcoin and other cryptocurrencies bore the brunt of the fallout.

In the past 24 hours alone, a staggering $1.19 billion in leveraged positions were liquidated across crypto markets. 

Of this, $878.12 million came from long positions, as overleveraged bulls were forced to exit amid falling prices. 

Bitcoin traders were particularly hard hit, with $6.12 million in BTC liquidations, while Ethereum topped the board at $7.52 million. 

A single liquidation on the ETH-USD pair on Hyperliquid accounted for $20.42 million, marking the largest single liquidation of the day. Nearly 290,000 traders were wiped out in the process.

This wave of forced liquidations created a feedback loop, where every drop in price triggered more auto-sells, deepening the market drop. 

Compounding matters, investors are now increasingly pricing in the likelihood that the US Federal Reserve may delay any interest rate cuts due to sticky inflation. 

That prospect has dulled the appeal of speculative assets like crypto, with higher rates generally draining liquidity from risk markets.

Adding further pressure, Bitcoin appears to be losing ground to gold in the eyes of institutional investors. 

Gold has overtaken the euro as the second-largest reserve asset held by central banks, now making up 20% of global reserves compared to the euro’s 16%.

Some analysts have called the recent positioning a form of “debasement trade” where investors hedge against currency dilution by holding hard assets like gold and Bitcoin. 

However, as crypto commentator Plur pointed out, this thesis increasingly seems to apply only to gold. “

Gold has stolen some of BTC’s thunder,” he said, arguing that Bitcoin has not shown the kind of momentum that would justify its role as a parallel hedge.

Meanwhile, Bitcoin miners have become a notable source of selling pressure as data from CryptoQuant shows that miners deposited 51,000 BTC to exchanges between October 9 and 16.

Historically, miners are among the largest holders of Bitcoin, so when they move coins to exchanges in large quantities, it usually foreshadows sustained selling.

And they are not alone as long-term whales have also resumed selling into market strength.

Among the most notable ones is the so-called “Trump Insider Whale” which was flagged by Arkham for moving $222 million in BTC to Coinbase earlier today, likely to sell. See below.

This whale has previously been associated with market tops, and their activity now adds another layer of bearish weight to the market.

Will Bitcoin price crash?

Confidence among investors appears to be fading, with Bitcoin struggling to hold above the $110,000 level for the second week in a row.

According to market analyst CryptoBird, the ongoing pullback is a classic pre-peak behavior that occurs in every major cycle. See below.

Bitcoin’s breach of key technical levels, including its 200-day simple moving average, has introduced structural fragility into the market, raising the odds of a deeper pullback, according to analysts.

As noted by Daan Crypto Trades in a post on X, Bitcoin price is “now testing the 0.786 fibonacci retracement level around $104,000,” a decisive move below that threshold, he added, could drag prices down toward the June lows near $98,000.

BTC/USD 1-Day price chart. Source: Daan Crypto Trades on X.

In the meantime, fellow crypto analyst Captain Faibik observed that Bitcoin seems to be forming a rising wedge on the weekly chart, a pattern that traditionally carries bearish implications, noting that “a 50% bearish correction is likely incoming in the midterm.”

Nevertheless, some analysts remain hopeful that Bitcoin may continue its upside journey after retesting key supports.

According to well-followed analyst BitBull, a sweep towards the $103,000-$104,000 level would be the “max pain” scenario following “a reversal and a new ATH” may be looming. 

BTC/USDC 8h price chart. Source: BitBull on X.

When looking at the 24-hour liquidation heatmap for Bitcoin, it becomes clear that the market remains under pressure, with dense liquidation clusters now forming between the $107,000 and $108,500 range.

BTC- 24-hour liquidation heatmap. Source 

These levels, previously acting as support, appear to be transitioning into resistance, as sell orders continue to get stacked just above the recovery zones.

Price action over the last day shows a sharp breakdown followed by a modest rebound, but so far, Bitcoin has failed to convincingly reclaim the upper bands of the heatmap where liquidations previously flushed out long positions.

The thickest bands of historical leverage have now moved lower, suggesting that short-term support is being tested around the $104,000 mark, which aligns with the 0.786 Fibonacci retracement level flagged earlier by analysts.

For now, upside appears capped unless Bitcoin can break through the liquidity wall near $108,000. 

If bulls fail to hold this level, it could put further pressure on the already fragile structure, leaving the door open for another sweep toward $103,000 or even a deeper retest of the June low near $98,000, particularly if macro conditions deteriorate.

At press time, Bitcoin had managed to bounce back above $106,000 after retesting the $104,000 support area, down 1.5% in the past 24 hours.

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