The cryptocurrency market is facing a broad pullback, with Bitcoin testing a critical support level as recent institutional inflows reverse and investor sentiment cools.
Bitcoin is trading around $110,800, down approximately 3.4%, while Ethereum has fallen about 4.5% to below $4,000, per CoinGecko data. The total crypto market capitalization has dropped 4.4% over the past 24 hours to $3.85 trillion, and trading volumes remain elevated, indicating volatility is likely to persist.
The recent liquidation cascade has brought Bitcoin close to $112,500, the short-term holder realized price level, which represents the average cost basis of new market participants, Maarten Regterschot, an analyst at CryptoQuant, told Decrypt.
The key metric often acts as a strong support zone during bull markets, but the strength of this level is now in question, Regterschot noted.
“It has been tested for the fourth time in just 1.5 months, which is not a sign of strength,” Regterschot explained. “While it still holds as support, each time a level gets tested, it becomes weaker. It appears that fewer buyers are stepping in.”
The market's fragile state is being compounded by renewed geopolitical friction, Ilia Otychenko, Lead Analyst at CEX.IO, told Decrypt.
“Markets were showing early signs of recovery until comments from China’s Commerce Ministry reignited trade war concerns,” Otychenko added, citing that the ministry’s pledge to “fight to the end” has shifted market attention back to the U.S.-China trade dispute, creating a persistent overhang of uncertainty.
Bitcoin ETF flows reverse
The cautious outlook and recent market crash coincide with a sharp reversal in the flows for U.S.-listed spot exchange-traded funds.
Otychenko warned that the pressure could continue. “Crypto ETFs are still feeling the ripple effects of last week’s tariff-driven selloff,” he said. “More withdrawals are possible if geopolitical tensions persist.”
Following a strong start to the week, U.S. spot Bitcoin ETFs experienced a significant outflow of $326.5 million on October 13, according to data from SoSoValue.
The rapid deterioration in institutional sentiment follows Bitcoin ETF inflows reaching a yearly high on October 6.
The changing mood is also reflected on Myriad, a prediction market launched by Decrypt's parent company DASTAN, where the "greed" sentiment indicator has dropped from 64.1% on Monday to below 50% at the time of writing. Fear, on the other hand, has accelerated, climbing to 51.1%.
The rebalancing suggests traders are becoming more cautious and risk-averse in the current uncertain environment with persistent macro risks.
Building on the bearish sentiment, Regterschot said that if the $112,500 support level breaks, the next key level based on short-term holder realized price is $103,500.
“During the 2025 bull run, Bitcoin’s price found support about 10% below the average cost basis of short-term holders. Assuming the bull run isn’t over, this is likely the next level Bitcoin is heading toward,” he added.
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