The cryptocurrency market is abuzz with uncertainty after Bitcoin (BTC) unexpectedly plunged below the psychological $100,000 mark. What was once seen as a signal of institutional maturity, Bitcoin's sustained price above this threshold has instead fueled renewed fears of a "crypto winter." On November 4, BTC briefly touched $99,075, its lowest point since May, before a modest recovery to around $102,437. This performance has been particularly stark, with Bitcoin notably lagging behind US Treasuries for the first time this year, dismantling one of 2025's most anticipated macro trades.
Why is Bitcoin's Price Falling?
Analysts suggest this downturn reflects a structural reset, not a systemic collapse. Key factors contributing to Bitcoin's recent struggles include:
- Lagging Traditional Assets: For the first time this year, Bitcoin's performance trailed that of US Treasuries, undermining a once-popular macro investment thesis. This divergence signals a shift in investor sentiment, as risk-off assets gain favor.
- Long-Term Holder (LTH) Profit Taking: A significant driver has been long-term holders realizing profits at unprecedented rates. Bitcoin analyst James Van Straten noted LTHs offloaded over 362,000 BTC since July, averaging about 3,100 BTC daily, accelerating to nearly 9,000 BTC per day recently. Johan Bergman’s analysis suggests an even higher figure, estimating approximately 2.1 million coins sold.
- Mounting Sell-Side Pressure: Data from James Check at CheckOnChain indicates a substantial $34 billion in monthly sell-side pressure as older coins move back onto exchanges. This influx has largely negated demand from new sources like ETFs and corporate treasuries, some prioritizing share buybacks over crypto allocations.
- Fading Speculative Activity: The market is witnessing a decline in speculative enthusiasm. Glassnode data reveals that funding rates for perpetual futures have dropped by 62% since August, from $338 million to $127 million monthly, signaling reduced leverage. This "underscores a clear macro downtrend in speculative appetite, as traders grow reluctant to pay interest to maintain long exposure."
- Tightening Global Liquidity: This fading enthusiasm coincides with a broader tightening of global liquidity. The prolonged US government shutdown immobilized roughly $150 billion in the Treasury General Account (TGA), withdrawing liquidity from risk assets. BitMEX co-founder Arthur Hayes observed an 8% decline in dollar liquidity since July's debt ceiling increase, correlating with Bitcoin's 5% decrease, highlighting their interconnectedness.
The Critical $95,000 Stress Point
Amidst this selling wave, James Check's analysis reveals that 57% of all dollars invested in Bitcoin are now in a loss. His cost-basis model points to $95,000 as a crucial psychological and structural support level. Roughly 63% of invested capital has a cost basis above this figure.
Unrealized losses currently stand at nearly $20 billion, representing about 3% of Bitcoin's market capitalization. Historically, full-blown bear markets typically commence when these unrealized losses exceed 10%. Therefore, a sustained drop below $95,000 could severely deteriorate market sentiment, potentially signaling the onset of a new bear phase. Check emphasized,
"Obviously nobody wants to make that call AFTER the price has already fallen, which is why $95k is a critical line in the sand to hold, as it deteriorates below."
Bear Market or Bear Trap? Diverging Expert Opinions
The industry remains divided on whether this marks the beginning of a deep bear market or merely a mid-cycle correction.
James Check advises: "There has been a tremendous rotation of coins in 2025, and a lion's share of it has occurred above $95k. We don't want to see the price fall below $95k, but I also expect the bulls to mount one hell of a fight to defend it. Prepare for a bear but don't believe the doomers."
Arthur Hayes, in his note "Hallelujah," views the decline as a temporary consequence of dollar scarcity, not a fundamental flaw. He anticipates a reversal once policymakers address the government shutdown and resume balance sheet expansion, which he believes will "reignite the Bitcoin bull market."
Matt Hougan, Chief Investment Officer at Bitwise Asset Management, shares a similar long-term bullish outlook. He describes the current situation as "a tale of two markets," with retail traders capitulating while institutions discreetly accumulate. Hougan maintains that Bitcoin’s risk-adjusted returns remain unparalleled, though the era of 100x yearly gains is likely over. He forecasts Bitcoin reaching $1.3 million by 2035, emphasizing that lower volatility makes it safer for allocators to increase their holdings.
Hougan concluded: "As an allocator, my response to this dynamic would not be to sell the asset—after all, we forecast bitcoin to be the best-performing large asset in the world over the next decade—but rather, to buy more of it. Put differently, lower volatility means it’s safer to own more of something."
As Bitcoin navigates this crucial period, the $95,000 mark stands as a key indicator, with the market awaiting whether it signifies a temporary dip or a more prolonged downturn.
Source: CryptoSlate
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