Bitcoin breaches critical support level: $98k drop triggers a decline reminiscent of May’s downturn.

Bitcoin (BTC) fell by 3% to $98,550.33 as of the latest update, dipping below the significant $100,000 mark for the third time this month due to ongoing leverage liquidations, continuous ETF outflows, and a general risk-averse attitude across digital assets.

The decline intensified after Bitcoin breached the support level at $100,000, resulting in over $190 million in long liquidations within the last hour, according to Coinglass data.

Earlier this week, Bitcoin was unable to surpass the support-turned-resistance level at $106,400, raising concerns about future movements. Nevertheless, each time it has fallen below that level, it has consistently rebounded around the psychological $100,000 support or at least the $99,000 support established in June.

Bitcoin price breakdown (Source: TradingView)

In the past 24 hours, total liquidations reached $655 million, further amplifying downward pressure as over-leveraged positions were unwound.

Ethereum decreased by 5.75% to $3,218.37, Solana fell by 5.2% to $145.55, and BNB dropped by 3.2% to $922.90, indicating a synchronized selling trend among major cryptocurrencies.

ETF flows turn negative as institutional demand softens

On November 12, US spot Bitcoin ETFs experienced net outflows of $278 million, contributing to approximately $961 million in total redemptions this month, as reported by Farside Investors.

The transition from net inflows to slight withdrawals eliminates a crucial stabilizing factor that had supported prices through mid-2025, making spot markets more susceptible to volatility driven by derivatives.

Historical trends indicate that reversals in ETF flows often align with consolidation periods rather than phases of directional conviction.

According to Glassnode’s analysis on November 12, Bitcoin has been trading below the short-term holder cost basis of $111,900 since early October, establishing a bearish environment marked by low liquidity and weak conviction.

The short-term holder realized profit-loss ratio fell below 0.21 near $98,000, suggesting that over 80% of the realized value originated from coins sold at a loss, indicating a capitulation intensity surpassing that of the last three significant washouts in the current cycle.

Glassnode identifies the sub-$100,000 area as a crucial battleground where seller exhaustion is beginning to emerge. However, a sustained recovery necessitates Bitcoin reclaiming the $111,900 cost basis as a support level.

Sentiment deteriorates as leverage dries up

Funding rates for Bitcoin perpetual futures remain low across major exchanges, with both funding rates and open interest declining since the leverage flush in October.

The lack of aggressive positioning reflects market uncertainty, with traders refraining from directional bets as volatility expectations stay elevated.

Data from the options market supports this cautious approach. Put protection trades are priced at an 11% implied volatility premium over calls for short-term expirations, indicating that traders continue to seek downside insurance.

Open interest is heavily concentrated around the $100,000 strike for end-of-November expirations, making this level a critical point where dealer hedging flows could increase volatility if surpassed.

Recent option flows have focused on puts between the $108,000 and $95,000 strikes, structured as outright protection or calendar spreads that capture expectations of near-term volatility.

Glassnode’s cost basis distribution heatmap shows a dense supply cluster between $106,000 and $118,000, indicating investors positioned to exit near breakeven.

This supply overhang creates natural resistance, where rallies may falter unless renewed inflows can absorb distribution pressure.

The firm notes that demand from short-term holders, a proxy for new investor momentum, has remained significantly weak since June 2025, indicating a lack of fresh capital entering the market.

Overall risk sentiment has worsened alongside declines in crypto, with higher real yields and ongoing funding stress putting pressure on speculative assets despite the recent resolution of the US government shutdown.

Morgan Stanley’s recent “fall season” note advised clients to take profits rather than pursue upside during this phase of the four-year cycle, contributing to a diminished risk appetite among institutional investors.

The combination of significant leverage positioning, weak ETF demand, and structural resistance above current prices has turned each breach below $100,000 into a self-reinforcing downward trend.

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