Morning Market Recap: Bitcoin Slips Below $100K for First Time Since May Amid Market Turmoil
Tuesday marked a turbulent session for cryptocurrency markets, with Bitcoin plunging below the psychologically significant $100,000 mark—a level it had maintained since May. The nearly 6% drop sent shockwaves across the digital asset space and triggered over $2 billion in long position liquidations across major exchanges.
This marked the first time in several months that Bitcoin broke below six figures, sending traders scrambling and reigniting debates around market sentiment and short-term price trajectories. While the correction was sharp, analysts suggest the drop may offer a necessary reset after weeks of overheated market conditions.
Market Fallout and Liquidation Cascades
The decline was not isolated to Bitcoin. Ethereum, Solana, and other major altcoins followed suit, with many logging double-digit percentage losses at intraday lows. The sudden downturn led to a flurry of forced liquidations, particularly affecting overleveraged traders who had bet on continued upward momentum.
This sell-off also closed a long-standing prediction market on Myriad, where users wagered on whether Bitcoin would hit $100,000 or $120,000 first. The result? A win for those who bet on the former, a development that many in the crypto community had been closely watching.
Investor Sentiment: Shaken, Not Destroyed
Despite the steep correction, some experts argue the market may be entering a healthier phase. Excessive leverage had been building over recent weeks, with open interest on perpetual futures soaring. The latest dip has flushed out speculative bets, potentially paving the way for more sustainable growth moving forward.
Long-term holders, often referred to as “diamond hands,” appear largely unfazed. On-chain data shows minimal movement from wallets holding Bitcoin for over a year, suggesting that core investors still believe in the asset’s long-term value proposition.
Macroeconomic Pressures Still Loom
The broader macro environment continues to influence crypto markets. Expectations around interest rate cuts by the Federal Reserve have shifted, with traders now pricing in fewer cuts in the near term due to persistent inflation data. This change in outlook has strengthened the U.S. dollar and weighed on risk assets, including cryptocurrencies.
Moreover, geopolitical tensions in Eastern Europe and the Middle East have added another layer of uncertainty, pushing some investors toward more defensive positions.
Technical Breakdown and Support Levels
Bitcoin’s technical chart shows the asset broke through a critical support level near $105,000, triggering algorithmic sell orders and panic among retail traders. Analysts now point to the $95,000–$97,000 range as the next key support zone. If Bitcoin consolidates at these levels, it may provide a base for the next leg upward.
Meanwhile, resistance is now forming around the previous support turned resistance at $105,000. A break above that level would be necessary to re-establish bullish momentum in the short term.
Altcoins Under Pressure
Ethereum dropped alongside Bitcoin, briefly touching $3,290 before rebounding slightly. Solana, Avalanche, and Cardano also saw notable declines, with some tokens falling as much as 12% intraday. Meme coins such as Dogecoin and Shiba Inu were not spared, reflecting the broader risk-off sentiment.
Stablecoins like USDT and USDC maintained their pegs, offering refuge for traders looking to exit volatile positions. However, trading volumes on decentralized exchanges (DEXs) spiked as users rushed to reposition.
NFTs and DeFi Feel the Ripple Effects
The downturn extended beyond tokens. NFT trading activity took a hit, with floor prices of popular collections like Bored Ape Yacht Club and Pudgy Penguins seeing downward pressure. Meanwhile, DeFi protocols experienced a surge in liquidations and collateral adjustments, particularly in lending platforms like Aave and Compound.
Total value locked (TVL) across DeFi protocols dropped by over $5 billion in a single day, reflecting both the decline in asset prices and user withdrawals.
Market Recovery: Green Shoots Emerging?
Despite the market-wide bloodbath, there are early signs of stabilization. Bitcoin managed to bounce slightly off lows, recovering to hover around $102,000 by Wednesday morning. Analysts note that such pullbacks are common in bull markets and can serve as buying opportunities for those with a longer investment horizon.
Some investors are even framing the dip as a “buy the fear” moment, especially with institutional sentiment remaining largely positive. Spot Bitcoin ETFs continue to see inflows, and several major financial institutions have reiterated their long-term bullish outlooks.
Looking Ahead: What to Watch
Traders will be closely monitoring upcoming macroeconomic data, including the next U.S. inflation report and Federal Reserve meeting minutes. Additionally, Bitcoin’s next halving event, expected in the coming months, remains a key narrative that could drive renewed interest.
On a technical level, maintaining the $100K threshold will be crucial for market confidence. Failure to reclaim and hold that level could invite further downside pressure, potentially testing the $90K region.
Conclusion: A Test of Conviction
Tuesday’s drop below $100,000 marks a significant moment in this cycle. While the correction was swift and painful for some, it also underscores the volatility that remains inherent in crypto markets. For long-term believers, this may be just another shakeout on the road to higher prices. For short-term traders, caution and risk management will be essential as the market finds its footing again.
As the dust settles, one thing remains clear: crypto markets continue to evolve rapidly, and adaptability remains the most valuable asset for any investor navigating this space.