Bitcoin has officially lost ground below the critical $100,000 level, rattling markets and fueling a wave of fear-driven selling. The move comes after a sharp rise in bearish sentiment, with CryptoQuant data suggesting that Bitcoin’s recent decline was largely psychological rather than fundamentally driven.
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Over the past few days, the market has gone from confidence to panic with remarkable speed. The Fear and Greed Index fell to 21 — deep into fear territory — just days after BTC briefly reached $107,000. The bullish narratives calling for a $150,000 to $200,000 breakout have disappeared from social media platforms, replaced by anxiety, disbelief, and calls for deeper downside.
Google search trends for interest in Bitcoin have declined significantly after October highs, reflecting weak retail enthusiasm. Meanwhile, altcoin sentiment collapsed to extreme lows, hitting -81 as traders across the board capitulated.
This emotional swing is not unusual for cryptocurrencies. With a relatively small market structure and significant involvement in speculation, cryptoassets remain highly sensitive to sentiment shocks. In many cases, price movements are influenced more by crowd psychology than by on-chain fundamentals. While the sell-off has been intense, analysts point out that network data remains resilient – raising the question of whether panic, rather than overall reality, is driving this correction.
On-chain data shows strength under the sell-off
Despite Bitcoin’s sharp decline below $100,000, on-chain data paints a very different picture beneath the surface. According to CryptoQuant a report According to XWIN Research Japan, there is no evidence of structural weakness or network deterioration – just an emotion-driven correction.
Key network metrics remain constant. Withdrawals from the exchange have risen, suggesting that investors are moving Bitcoin into self-custody rather than rushing out of the market. Meanwhile, the UTXO loss has risen to nearly 12%, indicating discomfort – but still far from levels associated with true capitulation phases in previous sessions. This indicates that most market participants are still positioned for the long-term upside.
At the protocol level, Bitcoin continues to show its strength. The hash rate remains near all-time highs at around 1.1 ZH/s, enhancing network security and miner confidence. The whale ratio has trended lower, indicating less selling pressure from large holders.
Liquidity dynamics also support a potential recovery. More than $10.7 billion worth of stablecoins recently flowed into Binance, providing significant dry powder for future accumulation. Realized cap data shows that long-term holders are trimming some dividends, but more importantly, incoming demand continues to absorb supply.
Overall, the decline appears to be sentiment driven rather than fundamental. On-chain signals suggest that the broader uptrend remains intact – making this volatility a test of conviction, rather than the beginning of a structural reversal.
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Major support is under pressure, short-term trend weakens
Bitcoin continues to trade under intense pressure after collapsing from the $110,000 range, falling below the psychological level of $100,000 before settling near current support around $101,800. The 4-hour chart shows a clear shift into a structure of lower highs and lower lows, confirming the short-term bearish momentum.
Moving averages reinforce this weakness: the price is trading below the 50, 100 and 200 period moving averages, indicating that the bears are still in control.
The sharp impulsive move lower was met with a surge in volume, suggesting panic-driven selling rather than a slow, distribution-based decline. Since then, volume has returned to normal as the price tries to consolidate above the $100,000 area. This area now acts as a pivotal demand zone – a break below it could expose a deeper downtrend towards $95,000-$98,000, where there is stronger historical liquidity.
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Despite the sell-off, Bitcoin is showing early signs of stabilization. A wick below $100,000 indicates that buyers intervened aggressively at this level, preventing further liquidations. However, the bulls need to reclaim the $105,000-$107,000 range to neutralize short-term bearish pressure and signal a potential recovery.
For now, the trend remains fragile as market sentiment cools and traders reevaluate their positions. Price stability above $100,000 is crucial – missing this range could lead to another wave of forced selling, while defending it could pave the way for a comfortable bounce.
Featured image from ChatGPT, chart from TradingView.com
The post ‘Bitcoin $100K Break Was Emotional’ – On-Chain Data Shows No Structural Damage first appeared on Investorempires.com.
