The cryptocurrency market is currently facing significant bearish pressure, with Bitcoin (BTC) struggling to regain previously crucial support levels.
Recently facts from CoinGecko indicates that Bitcoin has rebounded nearly 6% over the past week, a decline that has impacted other major cryptocurrencies including Ethereum (ETH),
Galaxy Digital Lowers Bitcoin Price Target
This downturn is in stark contrast to the bullish sentiment seen earlier in October, when Bitcoin hit its current all-time high just above $126,000 following a wave of margin buying.
However, the euphoria was short-lived as approximately $20 billion in leveraged positions in the crypto market were abruptly liquidated just days later on October 10, contributing to the continued lack of confidence among investors.
Michael Novogratz’s Galaxy Digital recently assessed lowered its year-end price target for Bitcoin to $120,000, a significant reduction from the previous estimate of $185,000, attributing the adjustment to “significant leverage elimination.”
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Market analysis firm CryptoQuant has pointed out that Bitcoin’s decline below its 365-day moving average near $102,000 could signal a deeper pullback. This moving average has historically acted as a crucial support level during this bull cycle, and failure to hold it could lead to a more substantial correction in Bitcoin’s price.
In their analysis, CryptoQuant experts delved deeper into the conditions needed for Bitcoin to reverse its current trajectory and potentially reach a new one all-time highs. They noted that Bitcoin led a global risk movement and tested the critical support level at $100,000.
This decline was influenced by a stronger dollar and continued uncertainties over Federal Reserve (Fed) policy, which have dampened broader risk appetite across asset classes.
Notably, there have been four consecutive sessions of approximately $1.3 billion in net outflows from the US spot BTC ETFsending what had been one of the strongest tailwinds for the market in 2025.
This reduced demand in the spot market coincided with forced deleveraging, resulting in more than $1 billion in extended liquidations at recent lows, which briefly breached intraday support before dip buyers intervened.
Stabilization of ETF flows crucial
The options market has further intensified volatility as dealers remain net short around the $100,000 strike, leading to increased hedging activity around this critical level.
The $100,000 limit is now a psychological barrier, and any stabilization of ETF flows could change market sentiment, provided no new macroeconomic shocks materialize.
On the macroeconomic front, the analysts to claim that the current environment remains favorable, even if clouded by the ongoing government shutdown in Washington. However, clarity on policy remains elusive.
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The Federal Reserve’s recent 25 basis point rate cut in October, which was accompanied by some dissent, was accompanied by a cautious tone that countered expectations for another rate cut in December.
Markets are currently pricing in a 60-65% chance of a next move, but as the Fed’s blackout period continues, policymakers may become more comfortable with the idea of a pause, which would help maintain a strong dollar and tight economies. credit terms.
For Bitcoin to move higher sustainably, CryptoQuant’s analysis suggests that a reversal of exchange-traded fund outflows and renewed confidence in risky assets will likely be necessary.
Featured image of DALL-E, chart from TradingView.com