Bitcoin: 3 Critical Signals Suggest BTC Could Slip Below $100K
Bitcoin (BTC) is teetering at a critical juncture as warning signs multiply, indicating that its much-celebrated $100,000 threshold may not hold. A perfect storm of investor fear, rising realized losses, and an uptick in market liquidations has cast a long shadow over the crypto market. As the pressure mounts, traders and long-term holders alike are bracing for the possibility of a deeper retracement.
1. Market Sentiment Drenched in Fear
Investor confidence is at one of its lowest points in months. The Fear and Greed Index has plunged below the 22 mark, entering “extreme fear” territory—a level not seen since the sharp market sell-off in April. Back then, Bitcoin tumbled by 8%, driven by widespread panic and a flurry of liquidations. A similar mood is prevailing now, with traders increasingly reluctant to re-enter the market, suggesting that emotional sentiment—not market fundamentals—is steering the course of BTC’s price action.
2. Realized Losses Signal Mounting Pressure
Losses are no longer hypothetical—on-chain data confirms that investors are actively realizing their losses in large volumes. Recent figures show that Bitcoin holders collectively absorbed nearly $1.76 billion in realized losses, a substantial increase that mirrors capitulation behavior. Compounding the bearish outlook, the Short-Term Holder Net Unrealized Profit/Loss (STH-NUPL) ratio has dropped into negative territory for the first time since April, indicating that short-term investors are selling at a loss. This metric, often a precursor to broader market capitulation, suggests that confidence is eroding even among those who typically ride out short-term volatility.
3. Capitulation Risks Grow as Leverage Rises
Despite the downturn, leverage is making a comeback in the market—a potentially dangerous trend. The Estimated Leverage Ratio (ELR) for BTC has climbed to a two-week high of 0.22, while Open Interest across exchanges rose by $5 billion. This resurgence in leveraged positions, especially during a period of heightened fear, raises the risk of further cascading liquidations if prices continue to dip. In parallel, nearly 300,000 traders are being liquidated daily, reinforcing the fragility of current market conditions.
One-Third of BTC Supply is Underwater
Data from CryptoQuant reveals that nearly 28% of Bitcoin’s circulating supply is currently held at a loss. This means that almost one in three BTC holders are underwater, creating a pivotal decision point. These investors must now choose whether to hold and hope for recovery—or cut losses and sell, potentially accelerating a downward spiral. The decision is heavily influenced by sentiment, which continues to lean toward caution over opportunity.
Macro Factors Add to the Downward Pressure
Beyond crypto-specific concerns, broader macroeconomic trends are also weighing on BTC. In just 30 days, the crypto market has shed over $1 trillion in value. Although altcoins accounted for the bulk of this exodus—approximately 70%—Bitcoin still contributed 23% of the total losses. This indicates that the sell-off isn’t isolated to smaller assets but includes a significant move away from BTC by both retail and institutional investors.
Support at $100K Turning into Resistance
After months of consolidation around the $100,000 mark, Bitcoin has now broken below this psychological level, falling by 4.71% at the beginning of November. This marks the first time in five months that BTC has dipped beneath $100K, signaling that what was once a strong support zone may now act as resistance. If bearish momentum continues, reclaiming this level could become increasingly difficult.
Short-Term and Long-Term Holders at Risk
Both short-term and long-term holders are now facing heightened risk. While short-term holders are already realizing losses, long-term holders (LTHs) may soon follow if sentiment continues its downward trajectory. Historically, capitulation by LTHs has marked significant bottoms in Bitcoin’s price cycle—but it often comes after substantial pain. With conviction fading, the likelihood of LTHs remaining steadfast diminishes.
What Could Reverse the Trend?
For Bitcoin to regain its footing above $100,000, several factors would need to align. First, investor sentiment must shift from fear to cautious optimism. This could be triggered by macroeconomic relief, such as cooling inflation or favorable regulatory developments. Additionally, a reduction in leverage and liquidations would help stabilize the market and rebuild confidence.
Institutional Activity: Silent but Watching
While retail investors show signs of capitulation, institutional players appear to be sitting on the sidelines, waiting for a clearer signal. Historically, institutions tend to enter during times of extreme pessimism when valuations are most attractive. However, with the current lack of a clear macro catalyst, their re-entry remains uncertain. Still, any signs of institutional accumulation could serve as a powerful counterbalance to the prevailing fear.
Bottom or Breakdown? BTC at the Crossroads
Bitcoin’s current position reflects a market trapped between hesitation and hope. On one hand, the presence of widespread losses and emotional fatigue could set the stage for a final capitulation—and eventually, a recovery. On the other, if confidence continues to erode, further breakdowns are very much in play. A decisive move below current levels could open the door to testing support zones in the $80,000–$85,000 range, with implications for the entire crypto market.
Final Thoughts
Bitcoin is navigating one of its most uncertain phases in recent history. The convergence of negative sentiment, financial losses, and increased leverage places the market on thin ice. While historical patterns suggest that such periods can precede strong recoveries, the risk of further downside remains high unless sentiment, liquidity, and macro conditions improve. For now, traders and investors alike should proceed with caution, as BTC’s next move could define the tone of the crypto market for months to come.