The Negative Atmosphere in Bitcoin is Changing: Critical Support Levels

Bitcoin (BTC) dropped to its lowest level in six months over the weekend. Experts indicate that the primary reason for this decline is liquidity tightening. Bitcoin fell to approximately $93,000 on Sunday morning, then showed a recovery around $95,000. This situation tested the weakest level seen since May. In the overall market, $619 million worth of liquidations occurred in the last 24 hours, with $243 million of this happening on the Bitcoin side.

Coinglass data shows that the Fear and Greed Index has dropped to 10, indicating that the market has entered the extreme fear zone. Derek Lim from the Caladan research team stated that the fundamental source of the current pressure is liquidity, expressing that the high TGA account stemming from the potential U.S. government shutdown has temporarily tightened liquidity. Lim forecasted that this pressure would ease as spending resumes and liquidity would return to the system. Additionally, it was noted that Japan's consideration of a 17 trillion yen stimulus package could support global liquidity.

Edward Carroll, the markets director at MHC Digital Group, explained that stresses in T bill spreads and the repo markets have increased. Carroll emphasized that this situation reminds him of the 2018 and 2019 periods and noted that crypto responds more quickly than traditional markets. Liquidity tightening and a weakening likelihood of an interest rate cut in December led to an exit of $1.1 billion from U.S. spot Bitcoin ETFs last week, increasing the pressure on prices. However, experts believe that the medium-term outlook has not deteriorated.

Carroll stated that Bitcoin is increasingly taking on the role of digital gold, expressing that when the liquidity cycle reverses, crypto assets will recover first. The critical support line for Bitcoin is currently at $94,000. BTC Markets analyst Rachael Lucas emphasized that the essential critical zone is between $88,000 and $91,000. Lucas noted that although the market has technically entered a bear phase, similar corrections in past cycles have led to strong rallies afterward. Lim indicated that analysts are currently watching the 50-week simple moving average level, which is around $103,000.

Losses were also observed in altcoins over the weekend. Ethereum fell to $3,144, XRP to $2.23, and Solana to $138.7. Derek Lim stated that high liquidity and strong market enthusiasm are needed for altcoins to gain strength, but currently, neither of these conditions exists. Therefore, the likelihood of an altcoin season in the near term is considered weak.