Bitcoin is approaching one of its weakest moments in the cycle. Price action confirms it. It is evident in the price action. onchain data screams it. The mood in crypto is tense and almost fragile
Bitcoin fell on Friday to an all-time low of $85,524, its lowest since April. Many didn’t think they would see this level again in 2018. The fall pushed the price of bitcoin more than 35% lower, wiping out all gains for the year and pulling risk sentiment throughout the market along with it.
Bitcoin has recovered to the $84,000 price range since the drop, which shows high volatility on crypto markets.
Glassnode data shows The realized losses are now at levels not seen since the November 20, 2022 FTX collapse. Short-term holders — those who bought within the last 90 days — are unwinding at scale. Now, their selling dominates the tape. It is now dominated by realized losses, a trend usually only seen in panic.
The market structure is also deteriorating. MEKhoko is an independent analyst who noted that Bitcoin was trading at a level more than 3.5 standard errors below its 200 day moving average. This type of difference has only appeared three times over the past decade: in late 2018, March 2020’s crash and June 2022’s Three Arrows/Luna collapse. Each of these events was a time when people were frightened, forced to sell, or exhausted.
This week is similar. Funding rates collapsed. Spot traders stepped in. Momentum traders vanished. The market’s marginal buyer— the one who chases strength—has simply stepped aside.
A chart that is stretched beyond its limit and a community that is trying to understand it are the results.
Some people point out macro pressures. Rate-cut hopes have faded. AI stocks broke down. Traditional markets saw a spike in volatility. Crypto had no chance.
Even so, the price of bitcoin has dropped to the range between $78,000-$82,000 in Giovanni Santostasi’s power law for Bitcoin. modelBulls have a small ray of hope, as the price returns to levels it last reached multiple times in 2020.
Other people point to Oct. 10, “mechanical glitch.” Tom Lee said The failure of the stablecoin’s price feed led to cascading losses across multiple exchanges. Before anyone knew what happened, nearly two million accounts had been wiped. According to him, the market is a mess. “limping along” Ever since.
Crypto market to open October 10 experienced a massive “flash crash” A sudden U.S. announcement of tariffs sent shockwaves throughout the global market. This resulted in over $19 billion in leveraged positions being liquidated within hours, marking it as one of the largest single-day wipeouts in crypto history. Even today, the effects of this crash can still be felt.
Others see pressure as deliberate. Mike Alfred accused The derivatives market is used by large players to push Bitcoin’s price lower. Lee confirmed that he was in agreement.
If major levels cannot be reclaimed, the probability that new highs will occur in coming weeks is now below 50%.
Price of Bitcoins
Bitcoin Magazine experts believe The core message that buying at every dip was once a good strategy is now a bad one. In downtrending markets, multiple failed dips are common, and the Short-Term Holder Realized Price — historically a pivot for recoveries — now acts as resistance. The 200-Week Average and Realized Prices, which are broader metrics of cost, sit around the $50K mark and slowly rise, meaning that eventual value zones can develop from anywhere between $55K-$65K depending on the duration of weakness.
The supply-demand indicator reinforces caution. VDD Multiples continue to rise as prices fall, indicating experienced holders are not accumulating, but distributing. The long-term supply of holders is declining as well, which is another indication that the market has not yet unwound. In contrast to the usual extremes at bottoms, funding rates and derivatives position have remained relatively stable.
Bitcoin has to close above the 350DMA and STH Price with a sustained close in order for the bear argument to be invalidated. A defensive and data-driven strategy is preferred over aggressive dip buying until then.
Bitcoin is currently trading at $84,283.
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Source: bitcoinmagazine.com
