Cryptocurrency Market Update
The cryptocurrency market is currently experiencing substantial bearish pressure. Bitcoin (BTC) is finding it difficult to reclaim its previous support levels.
Recent data from CoinGecko indicates that Bitcoin has increased nearly 6% in value over the past week. Unfortunately, this downward trend has also impacted other major cryptocurrencies such as Ethereum (ETH), XRP, Binance Coin (BNB), and Solana (SOL), all of which have faced double-digit losses during the same period.
Galaxy Digital Lowers Bitcoin Target Price
This decline stands in stark contrast to the optimism seen in early October when Bitcoin surged, reaching a high of just over $126,000 thanks to increased margin buying.
However, that excitement was short-lived. Just a few days later, on October 10th, around $20 billion in leveraged positions were suddenly liquidated across the crypto market, heightening investor skepticism.
In light of these developments, Galaxy Digital, led by Michael Novogratz, has revised its year-end Bitcoin price target from $185,000 down to $120,000, a significant cut attributed to “significant deleveraging.”
Market analysis firm CryptoQuant mentioned that Bitcoin’s drop below its 365-day moving average near $102,000 might suggest the onset of a deeper correction. This moving average has historically been a crucial support level in this bullish cycle, and failure to hold could signify a more considerable price correction.
CryptoQuant’s analysis also highlighted the criteria necessary for Bitcoin to potentially reverse course and aim for new all-time highs. They noted that Bitcoin has taken the lead in a global shift away from risk, testing the essential support threshold of $100,000.
This decline can be linked to a strong dollar and ongoing uncertainty concerning Federal Reserve policy, which has weakened risk appetite across different asset classes.
Interestingly, the US Spot BTC ETF has seen net outflows of about $1.3 billion over four consecutive days, reversing what had been a significant support boost for the market in 2025.
The diminished demand in the spot market has coincided with forced deleveraging, resulting in over $1 billion in long-term liquidations at recent lows, briefly breaking intraday support until push buying intervened.
Stabilizing ETF Flows is Important
Volatility in the options market has increased, with dealers maintaining a net short gamma around the $100,000 strike price. This has led to heightened hedging activities around this critical level.
Presently, the $100,000 mark has become a psychological barrier. Without another macroeconomic shock, market sentiment may improve once ETF flows stabilize.
On the broader economic side, analysts believe the current environment remains generally supportive, although overshadowed by the ongoing government shutdown in Washington. However, clarity on policies is still lacking.
The Fed’s recent 25 basis point interest rate cut in October faced some pushback, but the accompanying cautious stance dampened expectations for further cuts in December.
Markets are now pricing in a 60% to 65% chance of additional action, but policymakers may lean towards a wait-and-see approach during the Fed’s blackout period, allowing them to uphold a strong dollar and tight credit conditions.
According to CryptoQuant, a reversal of ETF outflows and renewed confidence in risk assets will likely be crucial for Bitcoin to achieve new sustained highs.
