Bitcoin is sliding hard this week, down 6.2% since Monday, after nearly $300 billion in crypto value disappeared. The coin fell below $100,000 for the first time since June. The decline comes at a time when traders are not stepping in to buy.
Confidence that pushed the market a month ago has faded. The information comes according to Bloomberg.
This downturn reverses the mood seen in early October, when Bitcoin surged to a new all-time high on aggressive buying using borrowed money. That run collapsed days later when roughly $19 billion in leveraged positions across the crypto market were wiped out.
Galaxy Digital, led by Michael Novogratz, cut its year-end Bitcoin target to $120,000 from $185,000, citing the losses from leveraged positions.
SkyBridge Capital founder Anthony Scaramucci said the impact of leverage feels like “a spear coming out of the steering wheel of your sports car… when you need to hit the brake, that’s when the leverage hurts you the most.” The market has not recovered its confidence since.
Support levels show signs of weakening
A month after Bitcoin reached $126,251, technical signals are pointing lower. One key level is the 365-day moving average around $102,000, which held as support since early 2023.
Market analysts noted that this level also failed during the late 2021 to early 2022 downturn. There is concern that staying below that level could increase selling pressure. It is not being treated as a temporary dip. It is being looked at as a shift in momentum.
While tech stocks have faced volatility this week because of concern over high AI valuations, traders in equities are still buying dips. The Nasdaq 100 is within about 2% of its late-October high, and the S&P 500 is also close to its recent peak.
Bitcoin, however, is nearly 20% below its own recent high, and traders are not adding new long positions.
Open interest in Bitcoin futures has dropped by more than $25 billion since October, showing that investors are closing positions.
Tony Sycamore, a market analyst at IG Australia, said the coin’s behavior has been frustrating because it is no longer climbing when risk assets rise, but it still falls when they fall. The downturn in global markets this week pulled Bitcoin lower along with everything else.
The prolonged US government shutdown, which began October 1, is also playing a role. Without steady government data flows, crypto traders are using private market indicators to understand price direction.
QCP Capital said this has created uneven expectations on how momentum is measured from day to day.
As Bitcoin remains under pressure, gold is rising. Spot gold moved above $4,000 per ounce on Thursday, rising 0.8% to $4,015.31.
December gold futures increased 0.8% to $4,024.60. The US dollar fell 0.3% after hitting a four-month high, which made gold more appealing to buyers using other currencies.
Other metals also saw movement. Spot silver rose 1.3% to $48.69 per ounce. Platinum gained 0.4% to $1,568.26, while palladium declined 0.8% to $1,407.41.
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