The flagship cryptocurrency Bitcoin (BTC) recently fell below the psychologically important threshold of $100,000, a decline that underscores various structural, behavioural and macro-economic pressures. According to the analysis from CoinPhoton, several key factors combined to push Bitcoin into a sharper correction than many traders expected.
Here’s a detailed breakdown of what’s driving the drop, and why this move matters for market participants going forward.
The immediate trigger: forced liquidations and long-holder exits
One of the most visible drivers behind the decline was the wave of liquidations triggered in the derivatives markets. According to the report:
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Over $683 million was liquidated in the last 24 hours alone, with about $556 million of that coming from long positions (bets that price would go up).
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In a 4-hour window, BTC alone lost around $164.5 million to liquidation, while other major coins like Ethereum (ETH) and Solana (SOL) added roughly $145 million more.
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Meanwhile, long-term holders (addresses holding BTC for six months or more) have been selling aggressively: about 815,000 BTC sold in the last 30 days, the highest since January 2024.
When forced liquidations hit and long-term holders begin distributing, the result is twofold: downward price pressure from the actual sales, and heightened uncertainty / capitulation as momentum traders rush to cover positions.
A weakening technical support: the $100,000 psychological level
The $100,000 level served as a psychological and technical support. But when large volumes of long positions are exposed, and holders begin cashing out, that level becomes vulnerable. As the report emphasises:
“The next important test lies in the region of $98,000-$100,000. This is where buying force needs to emerge strongly to prevent further declines.”
Without sufficient bids in that zone, the risk of falling into deeper support levels increases.
Macro-economic backdrop: shifting interest-rate and safety-asset dynamics
Beyond crypto-specific factors, broader macroeconomic signals are also weighing heavily. The article cites Nic Puckrin of Coin Bureau, who notes that:
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The potential for a U.S. government shutdown and missing economic data has created a gap in clarity, undermining confidence.
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Expectations for rate cuts have diminished, thereby reducing tailwinds for risk assets like Bitcoin.
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As the market turns more cautious, funds may shift toward safe-haven assets rather than speculative ones.
In short: when interest-rate relief becomes less likely and uncertainty rises, risk-assets such as crypto tend to suffer.
Behavioural/spending dynamics: long-holder fatigue and supply pressure
Another important dimension is the behavioural shift among long‐term holders (LTHs). Historically, when LTHs begin to distribute, it signals a phase of profit-taking rather than accumulation. The report points out:
“The current sell-off of ~815,000 BTC is comparable to distribution phases seen at prior peaks in 2021 and early 2024.”
When large holders move holdings back into circulation, supply pressure mounts—and this tends to happen when the market is less confident about future upside, reducing the floor for price support.
What this means for traders and investors
Given the confluence of the above forces, here are some implications:
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Short‐term volatility remains elevated. With liquidation risk high and structural support weakening, large swings (up or down) are more likely.
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Holding periods matter more. Staying in long-term accumulation mode may protect from panic selling, but distribution by large holders may precede extended drawdowns.
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Macro signals are increasingly important. For crypto, macro events (interest rates, fiscal policy, regulation) matter as much as on-chain fundamentals in this phase.
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Key support zones are critical. The $98,000–$100,000 band is now a pivotal zone; breaking below may open up deeper support levels, whereas a rebound here could signal resilience.
Conclusion
The slide of Bitcoin below $100,000 is not isolated—it’s the outcome of forced liquidation, long‐holder distribution, weak technical support, and a less favourable macro‐economic environment. Each of these factors alone would produce headwinds, but combined they create a potent stress on the market. For participants in the crypto market, this underscores the importance of risk‐management, understanding holder behaviour, and watching broader macro trends—not just price charts.
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