Bitcoin Crashing: What Happened?

Bitcoin's $98k Dip: Is This Just Another Mid-Cycle Blip, or Something More Sinister?

Bitcoin took a tumble today, dipping below $98,000. That's a 22% drop from October's high, mirroring the typical mid-cycle retracements we've seen in this bull market, according to Bitfinex analysts. But is it just a retracement? Or is something else going on under the hood? Bitcoin Price Crashes Below $98,000 To 6-Month Low

Digging Into the Data: Who's Selling?

CryptoQuant data suggests long-term holders are unloading Bitcoin at a record pace – about 815,000 BTC in 30 days. That's the most since early 2024. At the same time, spot and ETF demand is weakening. Profit-taking is definitely a factor; $3 billion in realized gains on November 7 alone. That's a lot of champagne being popped in the crypto world. But here's the thing: institutional buying has also dropped below daily mining supply. That's intensifying the sell pressure.

The price is currently hovering around the 365-day moving average of $102,000. If it fails to hold, we could see even deeper losses. JPMorgan analysts suggest Bitcoin's current production cost of $94,000 acts as a historical price floor. It's a comforting thought, but I'm not entirely convinced. (Models are only as good as the data they're trained on, and history doesn't always repeat itself).

What I find interesting is the market's apparent inability to rally on positive news. The US government shutdown is ending – well, winding down, at least. But Bitcoin and Ethereum are still under pressure. The White Whale on X (formerly Twitter, of course) argues that the shutdown isn't really over, that the short-term funding fix is just kicking the can down the road. Nara Sumas countered that the markets barely reacted when the shutdown began. It's a fair point. But the White Whale doubled down, arguing that markets react to shutdowns with a delay.

The Nasdaq Connection

Wintermute points out that Bitcoin is still closely tied to the Nasdaq, but with a twist: it reacts more strongly to stock market drops than it does to gains. This "negative skew" is usually seen in bear markets, not when Bitcoin is near all-time highs. It suggests investors are fatigued, not euphoric.

Two factors are at play here. First, capital has shifted toward equities in 2025. Big tech and Nasdaq growth stocks are soaking up the risk appetite. Bitcoin moves with the market when things go wrong but doesn't get the same lift when optimism returns. Second, liquidity in crypto is thinner than before. Stablecoin issuance has stalled, ETF inflows have slowed, and exchange depth hasn't fully recovered. This makes downside moves more pronounced.

And this is the part of the report that I find genuinely puzzling. Wintermute says BTC is holding up remarkably well, even with this persistent downside bias. It's less than 20% below its all-time high. The pattern is unusual near tops, but it also reflects Bitcoin's growing maturity as a macro asset. I'm not sure I buy that. "Holding up remarkably well" is a bit of a spin, isn't it? A 20% drop is still a 20% drop.

ChatGPT, for what it's worth, thinks Bitcoin could crash to $50,000 in the coming months. It cites fading momentum, a cautious Federal Reserve, and tightening liquidity. A drop to $50,000 would likely stem from a combination of tightening liquidity, ETF outflows, institutional profit-taking, and a break below key supports at $87,000 and $80,000. The AI model sees the April–August 2026 window as the most probable time for such a crash. Of course, ChatGPT also cautions that if macro conditions remain stable, Bitcoin could see a milder pullback to the $70,000 and $80,000 range. So, basically, it's covering all its bases.

Ali Martinez, another crypto analyst, suggests Bitcoin's next major market bottom could occur around October 2026, with a projected range of $38,000 to $50,000. His analysis implies that Bitcoin may continue to face gradual downside pressure as the current cycle matures.

The Canary Has Stopped Singing

Bitcoin, according to Timot Lamarre at Unchained, is a "canary-in-the-coal-mine for liquidity drying up in the market." The recent government shutdown caused the Treasury General Account to swell, absorbing liquidity. With the government reopening, more liquidity injected into the system should benefit Bitcoin's dollar price in the near term. But should doesn't mean will. The correlation between Bitcoin and the Nasdaq is broken, or at least, it's behaving in a way that suggests a fundamental shift in investor sentiment. The market isn't reacting to good news, and it's overreacting to bad news. That's not a healthy sign. And the fact that long-term holders are selling off at record levels is even more concerning.

A Calculated Risk or a Reckless Plunge?