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Bitcoin extended its decline early Wednesday, briefly dipping below the $100,000 mark for the first time in five months, as global markets tumbled and investors grew increasingly wary of tightening liquidity and macroeconomic headwinds.
The drop came amid a prolonged U.S. government shutdown, warnings from major banks about stock market overvaluation, and a loss of confidence that the Federal Reserve will deliver a rate cut in December. Combined, these factors triggered a sell-off across risk assets — and the cryptocurrency market was no exception.
At its lowest point of the day, Bitcoin fell nearly 5% to around $101,464, while Ether plunged more than 12% to $3,179, marking one of its steepest two-day losses since early 2025.
$2 Billion in Crypto Liquidations Shake the Market
The slump triggered a wave of forced liquidations, with more than $2.09 billion in crypto positions wiped out in just 24 hours, according to data from CoinGlass. Of that total, about $1.68 billion came from long positions, underscoring how traders were caught off guard by the sudden downturn.
Though this figure remains below October’s record $19 billion washout, the sentiment shift has been sharp. Traders have become notably more cautious, curbing leverage and trimming exposure across both spot and futures markets.
“Today’s weakness isn’t being driven by excessive leverage,” said Markus Thielen, CEO of 10X Research. “It’s long-term spot holders stepping back amid growing uncertainty.”
Thielen added that recent comments from Federal Reserve Chair Jerome Powell, who suggested that a December rate cut is not guaranteed, removed a key source of optimism just as whale selling intensified after the latest FOMC meeting.
Market Snapshot
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Bitcoin (BTC): $101,464, down 4.8%
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Ether (ETH): $3,310, down 9%
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XRP: $2.22, down 5.3%
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Total crypto market cap: $3.45 trillion, down 4.8%
Altcoins continued to suffer heavier losses, while Bitcoin’s market dominance climbed above 60% — its highest level in several months.
“Market structure trends clearly favor Bitcoin over smaller tokens,” noted analyst Benjamin Cowen, who projected that altcoins could fall another 30% versus Bitcoin in the coming weeks.
Wall Street Tumbles as AI Stocks Lose Steam
The pressure on digital assets mirrors the broader turbulence across global equities. U.S. stocks closed sharply lower on Tuesday, with the S&P 500 and Nasdaq Composite suffering their biggest one-day drops since October 10.
Technology shares led the decline, falling 2.3%, as investors reassessed stretched valuations tied to the ongoing artificial intelligence boom. Executives at Goldman Sachs and Morgan Stanley both issued fresh warnings about potential bubbles forming within tech-heavy sectors.
Jamie Dimon, CEO of JPMorgan Chase, cautioned that markets could face a significant correction over the next year, pointing to geopolitical tensions and slowing global growth.
The Longest U.S. Government Shutdown Adds to Market Anxiety
Fueling the uncertainty is the ongoing U.S. government shutdown, now entering its 36th day, making it the longest in history. The impasse has frozen the publication of key economic data, forcing investors to rely on private indicators like the ADP National Employment Report and scattered Federal Reserve commentary for policy guidance.
In the absence of official data, markets are operating in what analysts describe as a “data vacuum,” heightening volatility and feeding risk aversion.
Tech stocks led losses across all 11 S&P 500 sectors, while financials offered modest gains. Futures data hinted at a weaker U.S. open, amplifying concerns that selling pressure could deepen through the week.
Asia Mirrors the U.S. Sell-Off
Asian markets followed Wall Street’s decline overnight. The MSCI Asia-Pacific Index fell 0.8%, dragged lower by a 4.1% slide in South Korea’s Kospi. Meanwhile, U.S. E-mini futures slipped another 0.4%, extending losses from the previous session.
Traders across the region pointed to thin liquidity, selective buying, and weakening bids — all signs of a fragile risk appetite.
Traders Cite Policy Doubts, China Tensions, and Liquidity Strains
Crypto traders also pointed to a series of macro factors adding pressure on Bitcoin. Among them:
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President Trump’s renewed trade rhetoric toward China, which has rattled global risk sentiment.
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Lingering doubts about Fed policy direction, particularly regarding rate cuts in 2025.
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Tightening liquidity conditions across both crypto and traditional markets.
These factors, combined with whale selling and the exodus of leveraged traders, have produced a perfect storm for digital assets.
Analysts See Glimmers of Recovery — If Conditions Stabilize
Despite the gloom, some analysts believe the correction could create a foundation for a medium-term recovery.
Ryan Lee, chief analyst at Bitget, said Bitcoin could rebound to the $115,000–$120,000 range if macroeconomic signals improve and institutional inflows resume.
“Key catalysts to monitor include upcoming Fed rate decisions, ETF inflow data, and fresh regulatory updates,” Lee explained. “If those turn favorable, Bitcoin’s recovery could be swift.”
He also noted that Ethereum might find relief near $3,200, supported by layer-2 scaling developments and renewed activity in the DeFi ecosystem.
However, he warned that geopolitical shocks and unexpected inflation readings remain key downside risks that could trigger renewed sell-offs.
The Bottom Line
Bitcoin’s fall to a five-month low highlights how intertwined the crypto market has become with global macro forces. With nearly $2 billion in positions liquidated, confidence remains fragile as investors reassess risk across the financial landscape.
Until clarity returns from the Federal Reserve and Washington resolves the ongoing shutdown, traders are likely to stay defensive. For now, Bitcoin’s next move may depend less on blockchain fundamentals — and more on whether the broader markets can find their footing again.
