Bitcoin falls below $100,000 amid declining risk appetite

Bitcoin has nullified its summer growth, regaining positions achieved during Wall Street euphoria and a surge in institutional purchases, Bloomberg reports, writes UNN.

Details

On Tuesday, the cryptocurrency's price fell by 7.4% to $96,794 in New York trading, dropping below $100,000 for the first time since June. This is more than 20% below the record high reached a month ago, which corresponds to a bear market in stocks. Ether fell by 15%, and several so-called altcoins showed a similar decline, resulting in losses of more than 50% this year for many less traded and less liquid tokens.

The turning point came in October, when a powerful wave of liquidations wiped out billions of dollars covering bullish positions. Since then, traders have been cautious. Open interest in Bitcoin futures remains significantly below pre-crisis levels, and even though funding costs are becoming favorable, few are willing to return to trading. As a result, Bitcoin has grown by less than 10% this year, lagging behind stocks and again failing to meet expectations as a portfolio hedging tool.

"Bitcoin's fall to June lows reflects a market structure that is still struggling with psychological tension after the massive liquidation in October, which fundamentally changed how participants interact with the prevailing downtrend," said Chris Newhouse, research director at Ergonia.

As the publication writes, let's call it a sell-off without much confidence. According to data previously collected by Coinglass, the total amount of liquidations - both long and short - on Tuesday was a modest $1 billion. This is a significant decrease compared to the record high of $19 billion recorded on October 10.

Meanwhile, options traders have built up significant reserves against further declines: according to Coinbase-owned cryptocurrency exchange Deribit, put contracts expiring at the end of November with a strike price of $80,000 are in highest demand.

Bitcoin's decline reflects a reversal in the dynamics of promising technology stocks this week: shares of companies like Palantir and Nvidia fell amid renewed doubts about overvaluation. Bitcoin, often seen as an indicator of speculative momentum, is once again in sync with investor sentiment.

On Wednesday, Bitcoin recovered slightly in early Asian trading, adding 1.6%. As of 8:27 AM in Singapore, it was trading at $101,130, while other tokens narrowed their losses.

Cryptocurrencies face other obstacles, including outflows from exchange-traded funds (ETFs) and concerns about potential selling by companies engaged in digital asset treasury operations.

Over the past month, there have been outflows from both spot Bitcoin and Ethereum ETFs, indicating a weakening of investor demand after active growth earlier this year. And although it is still early November, the trend is currently purely negative, indicating a pause in the sector's development, the publication writes.

"While the long-term trend remains clearly bearish, the scale of October's liquidations has prevented traders from confidently holding short positions, leaving the market dominated by tactical short-term trades based on momentum rather than targeted trades," Newhouse said.

Bitcoin hits two-week low amid declining risk appetite after crash04.11.25, 11:17 • 2545 views

Recall

Earlier, fintech expert and co-founder of Concord Fintech Solutions Olena Sosedka warned that after the rapid growth in cryptocurrency value that occurred in September - early October, Bitcoin would enter a "breathing" phase. "Obviously, Bitcoin will fluctuate in the coming weeks," the fintech expert predicted.

At the same time, according to her, if inflows into ETFs (investment funds that allow large players to buy Bitcoin through traditional exchanges) remain at the current level, new records are only a matter of time.

However, Olena Sosedka warned that a sharp slowdown in institutional interest or a change in Fed policy could provoke a 10-15% correction in the coin's value.

"The market is very emotional right now, so it's important not to chase a high price, but to act strategically and gradually, with a cool head," advises the fintech expert.