Bitcoin continued its downward slide on Friday as growing macroeconomic pressures and aggressive selling by large holders rattled investor confidence. The broader crypto market lost over 5% in the past 24 hours, dragging total capitalisation close to $3.6 trillion, its lowest level since August.
Sentiment took a sharp turn for the worse, with the Crypto Fear and Greed Index plunging six points into the “extreme fear” zone at 22, a level last seen in April. Every major altcoin followed Bitcoin lower, with the entire top 100 cryptocurrencies trading in the red as panic spread across the market.
Why is Bitcoin falling?
Bitcoin’s price hit a four-month low of $103,856 as fresh worries about the stability of U.S. regional banks reignited fears of systemic contagion.
The selloff began after two major auto-sector bankruptcies, First Brands Group, burdened with $10 billion in liabilities, and Tricolor Holdings, owing $1 billion, exposed deeper cracks in private credit markets and risky lending practices.
These developments spooked investors and spilled into the banking sector, where Zions Bank and Western Alliance stocks fell 13% and 11%, respectively, following losses and legal troubles tied to their loan portfolios. U.S. equity benchmarks, the S&P 500, Nasdaq, and Dow Jones, also ended the day lower, amplifying risk-off sentiment.
As global markets turned defensive, Bitcoin and other risk assets bore the brunt, triggering a cascade of liquidations. Over $1.19 billion in leveraged crypto positions were wiped out within a day, with $878 million of that coming from long positions. A massive $20.42 million ETH liquidation on Hyperliquid marked the single largest of the day, leaving nearly 290,000 traders liquidated.
This liquidation wave created a self-reinforcing feedback loop, each price drop forced more automatic sell-offs, intensifying the decline.
The market slump was worsened by expectations that the U.S. Federal Reserve may delay interest rate cuts amid sticky inflation. Higher-for-longer rates tend to drain liquidity from speculative assets like crypto, making investors more cautious.
Meanwhile, institutional capital appears to be shifting toward gold. The precious metal recently surpassed the euro as the world’s second-largest reserve asset, accounting for 20% of central bank reserves compared to the euro’s 16%.
Although both gold and Bitcoin are viewed as “hard assets,” analysts note that gold has stolen Bitcoin’s momentum. As commentator Plur observed, “Gold has stolen some of BTC’s thunder,” suggesting Bitcoin’s hedge narrative is weakening.
Adding to the bearish weight, Bitcoin miners have ramped up selling. According to CryptoQuant, miners deposited 51,000 BTC to exchanges between October 9-16, a move that often precedes extended selloffs.
Long-term whales are also cashing out. The so-called “Trump Insider Whale,” flagged by Arkham Intelligence, moved $222 million in BTC to Coinbase, a wallet historically linked to market tops.
Will Bitcoin price crash further?
Bitcoin is now struggling to hold above the $110,000 resistance level. Analyst CryptoBird described the ongoing pullback as “classic pre-peak behaviour” seen near the end of every major cycle, suggesting the market may be entering its final shakeout before a long-term top.
Technical analysts highlight a fragile structure forming. Daan Crypto Trades noted that Bitcoin is now testing the 0.786 Fibonacci retracement level near $104,000, warning that a break below could push prices toward the June low of $98,000.
Similarly, Captain Faibik identified a rising wedge pattern on the weekly chart, a bearish signal, predicting a possible 50% correction in the midterm.
However, not all analysts are bearish. BitBull believes a “max pain” dip to the $103,000-$104,000 range could trigger a major reversal and set the stage for a new all-time high once the market stabilizes.
The liquidation heatmap shows dense clusters forming between $107,000 and $108,500, indicating strong resistance. Unless Bitcoin decisively breaks above this range, upside potential remains limited.
If bulls fail to defend the $104,000 support, the next target could be $103,000, and potentially $98,000 if macro conditions worsen.
At press time, Bitcoin had rebounded slightly to $106,000, down 1.5% over the past 24 hours, but volatility remains elevated as traders brace for the next move.
