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Cryptocurrencies and Stocks Fall as Traders Shift Course: How Low Can Bitcoin Go?
This week, global financial markets are facing a major sell-off as demand for risk assets — including cryptocurrencies and stocks — continues to decline.
On Tuesday, Bitcoin dropped below the historic $100,000 level, while the S&P 500 and gold fell 3% and 10% respectively from their recent highs.
On Wednesday, Bitcoin hit an intraday low of $99,110 before slightly recovering — marking a 21% decline from its October peak, according to data from CoinGecko.
The total cryptocurrency market capitalization fell to $3.44 trillion, the lowest level in four months.
The sell-off also triggered over $2 billion in crypto liquidations, marking the second consecutive day of heavy leveraged position wipeouts.
Despite uncertainty around the key catalysts behind the downturn or how strong network fundamentals remain, the key question for investors now is how much lower prices can go.
Analyst Outlook
Ryan Yoon, Senior Research Analyst at Tiger Research, expects Bitcoin to fall to $98,000, but maintains a long-term price target of $200,000.
According to Tim Sun, Senior Fellow at HashKey Group, the decline reflects a fundamental shift in market sentiment as investors become more risk-averse:
“Bonds are the only asset class that has shown meaningful gains, while most risk assets — from Bitcoin to gold and equities — have experienced broad declines. Even if downward pressure continues, the $85,000 level should remain a strong support zone for BTC,” he said in an interview with Decrypt.
Zehan Chen, lead operations analyst at Schroders, added that a strengthening U.S. dollar is one of the main drivers behind the market-wide price drop.
Liquidity Tightening and Macro Risks
Sun also pointed out worrying signals in short-term funding markets:
rising spreads, increased use of the Federal Reserve’s standing repo facility, and the U.S. Treasury General Account surpassing $1 trillion, effectively draining liquidity from the system.
This has heightened fears and uncertainty amid the ongoing U.S. government shutdown, which could last until December.
On the Myriad prediction market (owned by Dastan, Decrypt’s parent company), users estimated a 98.7% probability that the current government shutdown will become the longest in U.S. history.
According to Derek Lim, Head of Research at Caladan, liquidity tightening is amplifying the ongoing market sell-off.
On-Chain Data: Fear Rises, but Fundamentals Stay Strong
Despite overwhelmingly negative sentiment, on-chain metrics paint a more nuanced picture.
“Bitcoin’s recent drop below $100,000 is primarily sentiment-driven,” said a verified CryptoQuant analyst from XWIN Research.
The Crypto Fear and Greed Index fell to 21, indicating extreme fear among investors.
However, core network metrics remain strong — Bitcoin’s hashrate is near an all-time high, and $10.7 billion worth of stablecoins has flowed into Binance, potentially fueling future buying.
Analytics firm Santiment echoed this view, noting that social data shows many investors continue to buy the dip, reinforcing XWIN Research’s sentiment analysis.
See also: "Bitcoin Drops Below $104,000: Possible Target — $92,000"
