The price of the leading cryptocurrency fell to a six-month low of $93,000, before recovering to around $95,000.
According to CoinGlass, the crypto market saw $619 million in liquidations over the past day, with $243 million attributed to Bitcoin.
The Fear and Greed Index indicates “extreme fear.”
Derek Lim, head of research at Caladan, explained that liquidity is temporarily squeezed: the U.S. government shutdown led to an increase in the overall treasury account.
He anticipates imminent changes: the resumption of government spending will restore liquidity to the system, and Japan’s 17 trillion yen stimulus package ($110 billion) could support global financial markets.
Edward Carroll, head of markets at MHC Digital Group, agrees. He noted that funding indicators resemble the situation at the end of 2018 and 2019.
“The crypto market, being more reactive, adjusted earlier than TradFi,” Carroll said.
The specialist views the medium-term outlook as positive. He highlighted Bitcoin’s role as “digital gold,” expectations of liquidity recovery, and interest from institutional investors.
“The current pullback reflects tight financing conditions rather than a breach of cryptocurrency fundamentals. When the liquidity cycle turns, we expect digital assets to recover first,” the expert concluded.
Key Levels
BTC Markets analyst Rachel Lucas stated that Bitcoin is testing support around $94,000. She identified the $88,000–$91,000 range as critical.
Lim noted that experts are watching the 50-week simple moving average at $103,000. A weekly close below this level is considered a bearish signal.
The altcoin market also declined. Over the week, Ethereum dropped 11.6% to $3,185, XRP fell 8% to $2.25, and Solana decreased 16.1% to $141.
“Historically, altcoins require excess liquidity and euphoria to grow. Currently, neither is present,” Lim said.
He added that an altcoin season is unlikely to begin without improvements in these factors.
Earlier, QCP Capital analysts outlined the conditions for Bitcoin’s support through the end of the year.