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The cryptocurrency market is once again under pressure, with Bitcoin (BTC) struggling to hold above critical support levels. After a brief recovery in October, BTC has slipped nearly 6% over the past week, according to CoinGecko data. The decline has rippled across the broader crypto market, affecting major altcoins like Ethereum (ETH), XRP, Binance Coin (BNB), and Solana (SOL), which have all seen double-digit weekly losses.
The sudden shift in sentiment marks a stark reversal from early October’s bullish mood when Bitcoin climbed to a new all-time high slightly above $126,000. That surge, driven largely by leveraged buying, fueled optimism that BTC might soon approach the $130,000 mark. However, the enthusiasm proved short-lived.
$20 Billion in Leveraged Positions Wiped Out
The rally quickly unraveled as excessive leverage built up across major exchanges. On October 10, roughly $20 billion in leveraged positions were liquidated in just a few days, triggering a cascade of sell orders and a widespread loss of investor confidence.
This massive unwinding has left the market more cautious, with traders hesitant to re-enter aggressive long positions. The liquidation wave also contributed to declining trading volumes, reflecting uncertainty about Bitcoin’s near-term direction.
Galaxy Digital Slashes Bitcoin Target
In response to recent developments, Michael Novogratz’s Galaxy Digital revised its year-end Bitcoin price target down from $185,000 to $120,000. The firm cited the “significant leverage wipeout” as a major factor behind the downgrade.
Galaxy’s analysts believe that Bitcoin’s recent volatility has created a fragile environment where even minor macroeconomic shocks could trigger further downside. While the long-term fundamentals remain strong, the near-term picture points to consolidation rather than a quick rebound.
Key Support Level Threatened: The 365-Day Moving Average
One of the most important technical indicators now flashing a warning signal is Bitcoin’s 365-day moving average (MA) — a metric that has historically provided strong support during bull cycles. According to CryptoQuant, BTC has dipped below this critical level, currently near $102,000, raising fears of a potential trend breakdown.
If this level fails to hold, analysts warn that Bitcoin could enter a deeper correction phase, possibly retesting the psychological $100,000 support zone. This threshold has already been tested multiple times, and any sustained drop below it could shift market sentiment decisively toward the bears.
ETF Outflows Deepen Market Weakness
Adding to the bearish tone, the US spot Bitcoin ETFs — once a key driver of 2025’s bullish momentum — have seen four consecutive sessions of net outflows, totaling approximately $1.3 billion per day.
This sharp reversal in institutional demand has eroded one of the strongest tailwinds supporting Bitcoin earlier this year. The outflows also coincide with a wave of forced deleveraging, leading to over $1 billion in long liquidations near recent lows.
Despite these sell-offs, some opportunistic buyers have stepped in, helping BTC stabilize briefly above $101,000. Still, analysts say that renewed ETF inflows will be crucial to restoring confidence in the market.
Volatility Spikes as Options Dealers Hedge Positions
The options market is amplifying short-term volatility. Analysts note that dealers remain net short gamma around the $100,000 strike, leading to aggressive hedging activity near this level. This dynamic often increases price swings, making it harder for Bitcoin to establish a stable trading range.
The $100,000 mark has therefore become both a psychological and technical barrier — a zone where sentiment could pivot rapidly depending on ETF flow data and macroeconomic signals.
Macroeconomic Factors Add Uncertainty
The broader economic backdrop remains mixed. The ongoing U.S. government shutdown and lack of clarity around Federal Reserve policy continue to weigh on investor sentiment. A stronger U.S. dollar and global “risk-off” sentiment have also pressured Bitcoin, as capital flows toward safer assets.
However, analysts believe that the macro environment still offers some support for long-term holders. If inflation continues to moderate and the Fed adopts a more dovish stance in coming months, Bitcoin could regain upward momentum — but only after clearing key resistance zones and stabilizing ETF inflows.
Outlook: Bitcoin Needs Stability Before Recovery
For now, Bitcoin’s outlook remains uncertain. The breakdown below its 365-day moving average and the sustained ETF outflows suggest that caution is warranted. If BTC can hold above $100,000 and reclaim the $105,000–$110,000 range, analysts believe a recovery could form heading into December.
Until then, traders are advised to monitor ETF inflows, dollar strength, and macro policy updates closely. As history shows, major corrections often precede strong rebounds — but only when structural support returns to the market.
