What’s Driving Bitcoin’s Dip Below $100,000?

Bitcoin’s bullish outlook continues to deteriorate as participants shift to a risk-off stance.

The leading cryptocurrency fell below $99,000 after losing nearly 4% from Thursday’s intraday high of $103,690, according to CoinGecko data, reflecting a broader sense of risk off in traditional markets.

“Nasdaq is down about 2% and Bitcoin off a similar amount, as investors digest the fallout from the reopening of the US government after its longest shutdown,” said Ryan McMillin, chief investment officer at crypto fund manager Merkle Tree Capital. Decrypt.

U funding bill it only offers short-term relief, McMillin explained, suggesting that investors focus “on the damage already done.”

That includes weeks of missing economic data, a federal statistical system described as “permanently damaged,” and the White House. confirmation that the October jobs report will be released without the unemployment rate.

Compounding the macro pressure is the accelerated distribution by long-term holders of Bitcoin, according to a Glassnode. report on Thursday The 30-day change in supply held by long-term holders, which was already in negative territory, fell sharply, indicating that these investors are “accelerating their distribution.”

“The sale of long-term holders reached one of the highest levels so far this year, as prices reached new highs, and as demand began to contract,” CryptoQuant analysts noted in a separate Thursday. report.

These investors sold around 815,000 BTC in the past month, increasing the selling pressure to the highest level since January 2024.

It also comes amid weakened spot demand due to the outflow of funds from the Bitcoin exchange, reduced US buying pressure shown by a negative Coinbase premium, and a broader contraction in apparent demand, CryptoQuant analysts explained.

“The sale of whales in isolation is usually not significant. However, what makes it notable now is the lack of significant supply support from the buy side to absorb that sale.” Charlie Shery, head of finance at Australian crypto exchange BTC Markets, said Decrypt.

“Earlier in the cycle, ETFs and MicroStrategy provided steady demand,” Shery added. “Without those buyers, the recent heavy selling flow seems to be driving the steady decline in Bitcoin that we’ve seen.”

Meanwhile, users on the Myriad prediction market, owned by Decrypt’s Companion mother Dastan, have assigned a 56% chance of Bitcoin hitting $115,000 before $85,000, up from 68% on Wednesday.

Bitcoin’s trading range since early August could end if the $98,000 level fails to hold, McMillin noted, suggesting it could drop lower into the $90,000 territory, similar to what happened in June.

“The market is really looking for certainty to gain strength, but it’s not clear where it’s going to come from right now,” McMillin said.