Bitcoin drops below $105,000 due to pressure from US banks

The key takeaways

• As auto-sector bankruptcies revealed risky loans and financial stocks fell, the US regional banks were under pressure.

• Bitcoin dropped below the 200 day SMA and fell to $104,500, amid a $1.2 billion cryptocurrency liquidation.

• Analysts believe that $88,000 is the next important support level, provided $104,000 does not hold. 

BitcoinBTCThe price of ) decreased to $104,000 on a black friday event for the second time as signs that regional US banks were experiencing credit problems sparked a new wave of risk-aversion in the crypto markets.

Bitcoin extends losses as equities slide

Bitcoin prices began falling during New York hours of trading on Thursday. Investors turned defensive as equities fell, bonds gained and inflation rose. gold reaching a fresh all-time high.

The move came as a result of concerns about a looming financial crisis in the US. Regional banks were under pressure because they had been exposed to the two auto-sector bankruptcies. 

Related: Investors are getting better at spotting bad Bitcoin treasuries: David Bailey

In late September, First Brands Group filed bankruptcy. It is an Ohio auto parts company with liabilities of $10 billion. Tricolor Holdings was a subprime lender that had $1 billion worth of debt. 

This failure exposed the risky practices of lending in particular on private credit markets. Fears about contagion were triggered by this. 

Zions shares fell by 13% following the announcement that it will incur losses of $50,000,000 in the third-quarter on two loans issued from its California Division. Western Alliance shares fell by 11% as it filed a lawsuit against CantorGroup V, Inc. for fraud.

As a result, the S&P 500 dropped by 0.63% to close the day at 6,629.07 on Thursday, while the Nasdaq composite index declined by 107 points (-0.47%). Dow Jones lost 0.65% and closed Thursday’s trading at 45,952.24

Data from WalletHub shows that this panic has spread into the cryptocurrency market. Bitcoin hit an intraday low at $104,500 and the market cap of the entire crypto industry dropped by 5%. Cointelegraph Markets Pro The following are some examples of how to get started: TradingView. 

Bitcoin’s value plummets below $100,000

Bitcoin’s price decline of Friday increased the distance from its October 6th high. all-time high of $126,000 Liquidations on the derivatives’ market were massive, with a 16.5% drop.

Related: Bitcoin OG whales to blame for BTC’s painful rise: Willy Woo

Bitcoin was responsible for more than $317.8 Million of this total, which represents over $935.2 millions in positions that were closed. EtherETHLong liquidations accounted for $196.3 Million.

As shown below, the total loss on the short- and long-term positions was $1,19 billion.

“Another day with a lot of liquidations across the board. It’s not even just longs while the market has been going down,” said trader Daan Crypto Trades on Friday, adding:

“This is exactly what happens after most big flushes. Traders chop themselves up while trying to make back what’s lost.”

According to CoinGlass, additional data shows that Bitcoin prices are eroding liquidity at around $105,000. However, as the graph below illustrates more orders remain at $103,500.

It is possible that Bitcoin will drop even further in order to wipe out the liquid within this price range, before staging a sustainable recovery.

How low will Bitcoin prices go?

Bitcoin’s drop below $105,000 It lost support in key areas on Friday including the 200 day SMA of $107 520.  

It has led traders to speculate on just how low BTC’s price can go before it finds footing. 

“No reversal in sight at the moment for $BTC,” The analyst Block_Diversity In an X-post. 

A chart accompanied the article, highlighting key levels for traders to monitor on the daily charts, such as the last Friday low at Binance of around $101,000. Also, the areas where demand is highest are around $95,000, $88,000, and around the previous week’s lowest level.

“These are open targets, unless $BTCstarts getting support at $107.4K.”

“$104K is the HTF level that matters most right here,” said Sykodelic and fellow analyst Sykodelic both added that this area is expected to remain stable, as the daily RSI has now reached its lowest level since $74,000.

“The weekly close this week will be very important.”

You can also read about the advantages of using Cointelegraph reported, with the crypto Fear & Greed Index at yearly lows and at “extreme fear,” It is possible that the price of BTC could rise in the near future from its current level.

This article contains no investment recommendations or advice. Each investment or trading decision involves some risk. Readers should do their own research before making any decisions.