Recent on-chain data and market movements suggest Bitcoin is facing a significant test, with the crucial $100,000 level becoming the focal point for traders and investors alike. The market is closely watching to see if this support will hold after a sharp downturn triggered substantial liquidations.
The $104,000 Support Test and the Road to $100,000
Bitcoin’s price recently dipped below the critical $104,000 support level, a key threshold identified by on-chain analysis. According to Glassnode, this level represents the cost basis (the average purchase price) for the top 21% of recent Bitcoin buyers, a cohort whose behavior often dictates market structure. When the price falls below this group’s average entry point, it can signal increased sell pressure as these holders enter a state of unrealized loss, potentially leading to capitulation.
This breakdown has shifted the market’s attention to the major psychological barrier of $100,000. Analysts warn that a daily close below $105,300 could accelerate losses toward this level. While this price point is expected to be strongly defended, a breach could trigger a deeper correction toward the $92,000–$94,000 zone.
A Cascade of Liquidations and Shifting Sentiment
The move downward had an immediate and violent impact on leveraged traders. As Bitcoin broke below key technical levels, it triggered a cascade of forced selling .
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Massive Liquidations: In a single 24-hour period, over $1.3 billion in leveraged crypto positions were liquidated, one of the largest such events this year . The vast majority of these were long positions, meaning traders who bet on higher prices were caught off-guard .
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Institutional Pullback: The foundation of the market has also been weakened by institutional flows. U.S. spot Bitcoin ETFs have seen consistent net outflows, totaling $1.3 billion over several days, indicating a defensive shift in institutional sentiment.
The Bigger Picture: Capital Rotation and Macro Pressures
This correction is occurring within a broader market context. Bitcoin’s dominance (BTC.D) has soared above 60%, meaning it is taking up a larger share of the total cryptocurrency market capitalization. This indicates a “risk-off” sentiment, with capital rotating out of more speculative altcoins and back into Bitcoin. In this environment, often called a “Bitcoin Season”, fewer than 5% of major altcoins are outperforming BTC, leaving little room for altcoin breakouts.
Furthermore, the market is grappling with macroeconomic uncertainty. Despite a recent rate cut, the Federal Reserve’s cautious tone has led traders to scale back expectations for further easing, strengthening the U.S. dollar and creating a headwind for risk assets like Bitcoin.
The $100,000 level is now the line in the sand. A successful defense could stabilize the market and establish a base for its next move, while a breakdown would likely redefine the short-term bullish bias.
