What's Driving Bitcoin's Price Down? Is a Rise Still Possible? Analysis Firm Explains!
Bitcoin experienced a significant crash, dropping below the $100,000 mark due to a stronger dollar and uncertainty regarding Federal Reserve actions. This decline negatively impacted risk appetite, leading to approximately $1.3 billion in net outflows from US spot Bitcoin ETFs over four days. Additionally, forced deleveraging caused over $1 billion in long position liquidations, while options market investors increased hedging around $100,000. Analysts attribute the drop to technical factors and ongoing macroeconomic pressures, including uncertainty about future Fed rate cuts. Despite these challenges, analysts believe Bitcoin could recover if ETF inflows resume and investor confidence in risky assets returns.
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Bitcoin's Crash Below $100,000
Bitcoin experienced a major crash as its price fell below the psychological level of $100,000 last night. This significant drop has raised concerns across the cryptocurrency market and triggered analysis into its causes and impacts.
Reasons Behind the Decline
Singapore-based analysis firm QCP Capital evaluated the reasons behind Bitcoin's recent decline. According to their analysts, the fall was caused by a stronger dollar and uncertainty surrounding the Federal Reserve's actions. This drop below $100,000 also negatively impacted the risk appetite of investors globally.
Impact on US Spot ETFs
QCP analysts highlighted that this decline in risk appetite and ongoing macro pressures were reflected in US spot Bitcoin ETFs. These ETFs saw four consecutive days of net outflows totaling approximately $1.3 billion. Analysts remarked, "This reversal in ETFs has turned one of Bitcoin's strongest tailwinds of 2025 into a near-term headwind."
Forced Deleveraging and Investor Behavior
A weaker spot demand for Bitcoin coincided with forced deleveraging, resulting in liquidations exceeding $1 billion in long positions. Investors in the options market have also increased hedging activities around the $100,000 level, further impacting the market's dynamics.
Federal Reserve Actions and Market Expectations
The uncertainty extends to the Federal Reserve's decisions. The 25 basis point rate cut in October, met with rare opposition, has led markets to cautiously adjust their expectations for another rate cut in December. Currently, market pricing stands at 72.1% for a 25 basis point rate cut in December and 27.9% for keeping rates unchanged.
Bitcoin's Future Outlook
Despite the uncertainty and increasing macroeconomic pressures, analysts believe Bitcoin could rebound. They stated that a sustained upward rally would depend on ETF net outflows turning into inflows and a return of investor confidence in risky assets.
This is not investment advice.