Bitcoin falls below $109,000, resulting in a $170 billion loss for the cryptocurrency market.

The cryptocurrency market is experiencing turmoil following a sudden downturn that has wiped out almost all of its recent advancements, with Bitcoin dropping below $109,000 and Ethereum falling beneath $4,000.

This sell-off has left traders contending with significant volatility, forced liquidations, and a heightened sense of caution throughout digital assets.

FOMC aftermath

Timothy Misir, the head of research at BRN, characterized the ongoing decline as a “post-FOMC aftermath,” noting that Bitcoin’s price fell to as low as $108,652 during the week.

According to Misir:

“The move flushed highly leveraged longs and prompted a swift repricing: volatility spiked, puts were bought aggressively, and front-end skew moved materially higher.”

Significantly, this price drop fell below BTC‘s short-term holder realized price of $109,700 for the first time in five months, indicating stress among recent purchasers.

Bitcoin Short Term Holders Realized Price (Source: JA Maarturn)

Ethereum reflected this weakness, reaching its lowest point since early August. Solana dipped below $200, and the total cryptocurrency market capitalization lost approximately $170 billion within 24 hours as investors exhibited risk aversion.

CryptoQuant analyst JA Maarturn highlighted that this current sell-off signifies a substantial cleanup in risk-on positioning. He estimated that $11.8 billion in leveraged altcoin investments and $3.2 billion in speculative Bitcoin positions have been eliminated, effectively resetting the risk appetite across the market.

What lies ahead?

In spite of this decline, analysts at Matrixport have suggested that the derivatives markets are presenting mixed signals for cryptocurrency investors.

“Funding costs, leverage, and volumes across BTC, ETH, and SOL indicate both fragility and opportunity,” they remarked, pointing to clustering signals around crucial on-chain thresholds that often precede significant breakouts.

They also noted that Bitcoin is approaching the apex of a symmetrical triangle, a technical pattern that has historically preceded decisive movements.

However, with options traders already positioning near the critical $110,000 level, any deviation from the typical seasonal volatility pattern, which generally intensifies in mid-October, could trigger an earlier breakout or a deeper correction.

They concluded:

“Emerging patterns in skew, open interest, and volatility suggest the next phase of the cycle may unfold very differently from the last.”

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