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In recent weeks, Bitcoin (BTC) 
$94,215 has experienced a significant drop, falling over 20% from its peak of $126,000 to approach the critical $100,000 mark. The crypto market is grappling with a level of volatility that wasn’t even seen during previous major global events, like the trade war declaration by Trump against China. As cryptocurrencies plunged, altcoins are struggling to survive, and positive developments such as regulatory advancements, reserve company maneuvers, and new ETF approvals seem to have been forgotten. What exactly is happening in the crypto world?
Binance Offloads While the US Retreats
Today’s market sell-off was predominantly triggered by large investors on the Binance exchange. There have been reports for days that US investors are fleeing risk, with signals from Coinbase Premium adding to the negative sentiment. As US investors hedge their risks, big investors on Binance have also begun reducing their risk, leading to long liquidations exceeding a billion dollars and seeing BTC fall to $100,010.
Across many exchanges, particularly those with futures pairs, BTC experienced momentary dips below $100,000. Currently, the supports at $102,000 and $100,400 are crucial levels. To stabilize the market, government shutdowns need to end, US financial data should support crypto, and AI growth expectations—recently weakened by the Palantir report—should be revitalized. Michael Burry even commented on the anticipated AI crash and announced he was shorting the market. Given Burry’s recent track record of poor predictions, is it possible he’s wrong again?
Crypto analyst MikybullCrypto had anticipated a downturn due to long-term structural disruptions and pointed to Binance investors as the trigger. The current market’s decline is evident through the exchange CVDs shown above.
Cryptocurrency Analysts Weigh In
Analyst DonAlt has been expecting this decline and suggests we might see lower levels unless ETH regains $3,800. Currently, ETH is facing a significant loss, falling below $3,300 with a 9% drop.
Similarly, analyst Jelle shared important levels for BTC, emphasizing the need to defend current areas. The market is seeing effects such as the 50-week MA/EMA cluster and round number support at $100,000, with corrections leading to multiple significant dips.
Ali Martinez highlighted a worst-case scenario for Ether, predicting a drop to $2,400 and $1,700 if the $3,800 support isn’t regained. His analysis is shown in the chart below.
Yesterday’s signals of burgeoning negativity were intensified today. The rise in SOFR indicated escalating market risks, succinctly summarized by a user with the pseudonym e507.
Recent Fed announcements of suspending asset sales in December implied monetary expansion, creating a trap-like scenario for cryptocurrencies. Despite various potential positives for a market rebound, Bitcoin has been unable to maintain $100,000 under sustained investor sell-offs.
