Key Takeaways
What Caused Bitcoin’s Drop Below $100,000?
More than $492 million in liquidations and $577 million in ETF outflows caused prices to fall as institutions took profits.
What could help BTC recover next?
Strong retail accumulation on Coinbase and bullish Puell. Multiple measurements point to renewed upside potential in the short term.
Bitcoin [BTC] faced an intense sell-off, with the asset falling well below $100,000 for the first time since June 23.
The dip caused about $492 million in liquidations in 24 hours, according to Derivatives trackers. Still, early demand returned as buyers tested discount offers.
US retail and the broader market are regaining confidence
US retail investors are returning to the market after the previous day’s decline, with buying activity increasing on major exchanges.
The Coinbase Premium Index – a key indicator that tracks the difference between Coinbase and foreign exchange rates – rose to -0.9, approaching the neutral to bullish zone (positive territory).
While retail sentiment has not yet turned completely bullish, the data indicates that investor conviction is growing as traders accumulate Bitcoin at perceived discount levels.
Source: CryptoQuant
The broader market reflected this shift. According to the Puell Multiple, one of Bitcoin’s on-chain valuation indicators, the metric climbed to around 0.9 at the time of writing.
Historically, values at this level imply continued accumulation and potential for further upside until the indicator reaches around 6, which often indicates overvaluation and precedes a correction.
Reached historic levels
The recent market decline pushed Bitcoin into the 365-day moving average (MA) – a historically important zone for identifying major price reversals.
This indicator has consistently marked crucial turning points for Bitcoin.
For example, in April, after a broad sell-off driven by former US President Donald Trump’s rate hike, Bitcoin entered this zone and subsequently recovered.
A similar pattern emerged in August 2024, when Bitcoin rebounded again after trading near this level. The asset has now revisited the same zone, indicating another potential rally.
Source: TradingView
This range also corresponds to the lower Bollinger Band, a zone that has often acted as a springboard for price rebounds. Based on this setup, Bitcoin could target the upper Bollinger Band – around $115,682 – if buying momentum strengthens.
The institutional outflow is an obstacle
However, institutional investors remain a major obstacle to a large-scale rally.
Data from Spot Bitcoin ETFs in the US shows that institutional holders have continued to offload their positions since the start of the week, adding to downward pressure on prices.
According to SosoValuethe group recorded outflows of approximately $577 million, marking the largest single-day withdrawal since July 1.
Source: SosoValue
With a combined net asset value of approximately $134.5 billion, continued selling by institutional investors could dampen Bitcoin’s recovery potential and limit its near-term upside momentum.
Speaking to StealthEX CEO Maria Carola, she warned that despite signs of bullish momentum returning to the market, downside risks still remain.
“If the US government shutdown continues and the Federal Reserve fails to take a clear position on interest rates, there remains a good chance that Bitcoin will retest the $100,000 level.”
She added that government uncertainty and weakening institutional demand could increase market volatility.