Bitcoin (BTC) experienced intensified selling pressure on Tuesday, abruptly falling to 4-month lows of $100,800. While market analysts are still evaluating the precise catalysts for the current downturn, there is a prevailing sentiment that BTC price could decline further, potentially finding a bottom in the $95,000 range.
Potential Bottoming Range Identified
Popular trader HORSE shared a chart suggesting a potential bottom could be approaching if the $100,000 level does not prove to be a temporary "trap."
“Maybe you get a trap at this low, but if not, these are the levels I am looking toward for Bitcoin. You want to see $100K get front ran, because big round numbers like that, if traded, get smoked on the return just like on the way up.”
Liquidation Heatmap Indicates Risk Levels
Liquidation heatmap data from Hyblock indicates that leveraged long positions around the $100,000 mark are at risk of absorption. Following this level, there appears to be relatively thin liquidity until the $88,000 price point.
Historical Precedents and Moving Averages
Crypto media personality and trader Scott Melker highlighted a historical pattern concerning Bitcoin's weekly 50-day Moving Average (MA). Melker noted that Bitcoin has definitively lost the weekly 50-MA as support four times in history, and on each occasion, the price subsequently tested the 200-day MA.
Melker stated:
“Price is currently $700 above the 50MA. The 200 MA is sitting around $55,000 (and rising).”
Potential Impact of Institutional Portfolio Stress
Another theory circulating on X suggests that the recent crypto market sell-off on October 10, which resulted in the liquidation of approximately $20 billion in Bitcoin positions and even larger figures across the total market, may have severely impacted the portfolios of professional and institutional entities.
Analysts, such as options trader Tony Stewart, have proposed that these financially strained funds could be the source of the overwhelming selling pressure observed in Bitcoin markets on Tuesday. While the specific entities remain unidentified, Stewart indicated that "there will by now be large firms that can see the blurred body image underwater."
In his post, Stewart elaborated on methods to identify funds under duress and the potential implications for Bitcoin's future price trajectory.