Bitcoin Drops Below Key Average as Fear Grips Crypto Market
Bitcoin faced continued pressure on Friday as markets processed a significant drop below its 365-day moving average — a threshold that has thus far established the floor of the current cycle. The Fear and Greed Index is currently at 21, reflecting a significant level of fear among investors — a feeling often seen as a possible chance to buy. Despite this, spot flows remain low, and ETF outflows have continued for four consecutive sessions. Altcoins mirrored Bitcoin’s decline but largely stayed within important support zones. Ethereum experienced a brief dip to $3,250 before making a modest recovery, while XRP and Hyperliquid faced notable declines, each down approximately 5 percent. The positioning of Ethereum’s derivatives has experienced a notable adjustment, marked by low open interest and a predominantly neutral funding environment. Experts indicate that these circumstances typically signify a foundation being established instead of a beginning of distress.
“This suggests a lack of steady institutional engagement.” data shows a marked rise in selling activity from older wallets, alongside a significant increase in exchange withdrawals. This indicates that some of the selling pressure is being alleviated as long-term holders move their supply off exchanges. “Overall, the market structure remains fragile but hasn’t collapsed, with actual losses still significantly lower than previous capitulation levels,” remarked Vikram Subburaj. Subburaj noted that the current macroeconomic landscape is creating obstacles rather than offering support. The US dollar continues to show strength after strong jobs data reduced the chances of a rate cut in December, while global equity markets take on a more cautious approach. Gold has climbed back up to $4,000 as investors turn to safer assets. “Liquidity indicators like M2 and real yields suggest a potential expansion phase on the horizon, yet sentiment continues to be delicate.” “Unless ETF flows stabilise or the US Federal Reserve signals a clearer easing path, crypto’s rebound potential will likely remain limited in the short term,” Subburaj noted.
Riya Sehgal observed that the crypto market is currently experiencing a downturn, with total capitalisation declining by more than 6 per cent this week and liquidations surpassing $580 million in the last 24 hours. “Market weakness is being exacerbated by outflows and slower institutional demand, as investors’ short-term risk appetite diminishes following recent liquidation events. Broader equity markets are facing challenges, with Asia and market experiencing significant declines, as traders exercise caution in light of possible actions from the Federal Reserve,” Sehgal stated. Experts pinpoint $97,000 as the crucial risk limit for Bitcoin. Currently, Bitcoin is valued at $102,081.24, showing a decline of 1.24 percent over the past 24 hours, with a trading volume of $68.92 billion. The token has varied between $100,336 and $103,575 throughout the session, according to data. Subburaj advised investors to consider 102,000 as the pivotal point and 97,000 as the threshold for risk. “Take action on reclaims or if it closes back above $102,000.” If there’s a decline to $97,000 because of rising spot selling, it’s prudent to pause and observe for market stability. This is a spot-led drawdown marked by ETF outflows, soft flows, and a Fear & Greed index reading of 21.
“I favor spot/TWAP additions instead of leverage, and I recommend maintaining strict, pre-determined exits rather than averaging down,” he stated. From a technical standpoint, Sehgal asserts that Bitcoin continues to experience pressure, facing a significant barrier at $105,000, with immediate resistance located between $103,500 and $104,000. “A sustained move below $100,000 could test support at $98,800, maintaining a bearish short-term trend,” Sehgal stated. Meanwhile, Ethereum is currently consolidating after multiple failed recovery efforts, with downside targets noted between $3,150 and $3,050. At present, ETH is down by 1 percent, with a trading price of $3,353 and a 24-hour trading volume of $37.23 billion. According to data, the asset has experienced fluctuations ranging from $3,245 to $3,412.03 over the last 24 hours.
