A Necessary Reset for the Crypto Market
Analysts frame a renewed dip as a purge that would hit leveraged traders, derivatives funds, and company treasuries positioned for low volatility. The recent slide wiped an estimated 370 billion dollars off the total crypto market value and sharpened focus on whether support around $104,000—tracked by many quant funds—will be revisited.
Liquidations accelerate when collateral falls below minimums and exchanges close positions, creating cascades in volatile markets. During the recent swings, such cascades erased between 19 and 20 billion dollars in a single day, underscoring how fragile high-leverage conditions can be even when spot prices later stabilize.
The Crucial $104,000 Support Level
The $104,000 price point has emerged as a critical technical and psychological level for Bitcoin. Analysts are closely watching this zone, as it aligns with the 50-week simple moving average (SMA), an indicator that has provided strong support on four separate occasions since the current bull market began in mid-2023. Historical patterns show that previous touches of this support in April 2025 at $74,000 and August 2024 at $49,000 were both followed by powerful reversals, leading some analysts to believe a similar dynamic could play out now. The market currently sees a major liquidity cluster around $104,000, which traders widely expect to be tested. As one analyst noted, while it’s not what holders want to hear, it is very likely this level is taken out, often feeling worst right before a reversal occurs.
Diverging Views and the Road to Recovery
Despite the cautious short-term outlook, the long-term narrative for Bitcoin remains largely intact, though expert opinions on the immediate path diverge. On one hand, analysts like Standard Chartered’s Geoffrey Kendrick see a near-term dip below $100,000 as “inevitable” due to factors like renewed U.S.-China trade tensions, yet they view any such pullback as a short-lived buying opportunity, maintaining a bullish year-end forecast of $200,000. On the other hand, Galaxy Digital CEO Mike Novogratz offers a more cautious year-end forecast, expecting Bitcoin to land between $100,000 and $125,000. He notes that the recent deleveraging, while making the market healthier, has also reduced liquidity, and it takes time for markets to heal and regain momentum.
The foundation for a recovery appears to be forming. The violent deleveraging event has reset market conditions, with futures open interest falling sharply and funding rates normalizing. Furthermore, while speculative traders were being liquidated, institutional players were often quietly accumulating Bitcoin on the dip, demonstrating continued long-term conviction. The return of sustained demand through spot Bitcoin ETFs is also cited as a decisive factor that will help determine whether Bitcoin can reclaim higher price ranges and build sustainable momentum.
