Key Points:
Regional bank pressures in the U.S. are impacting the market, with bankruptcies in the automotive industry exposing high-risk loans, leading to declines in financial sector stock prices.
Bitcoin has fallen below the 200-day moving average (SMA), hitting a low of $104,500, during which the cryptocurrency market saw $1.2 billion in liquidations.
Analysts believe that if the $104,000 support is breached, $88,000 will become the next significant support level for Bitcoin.
Bitcoin (BTC) dropped to $104,000 during the second "Black Friday" event, as credit tightening among U.S. regional banks triggered a new wave of risk aversion in the crypto market.
During Thursday's trading session in New York, Bitcoin's price began to decline as investors shifted to defensive positions, with stocks falling, bonds rising, and gold reaching new highs.
Previously, concerns over financial turmoil in the U.S. intensified, with regional banks under pressure due to two bankruptcy events in the automotive industry.
Ohio-based auto parts supplier First Brands Group has $10 billion in debt. Subprime auto loan company Tricolor Holdings has $1 billion in debt. Both companies filed for bankruptcy in late September.
These bankruptcies have exposed high-risk lending practices in the private credit market, raising concerns about risk contagion.
Zions' stock fell 13% after disclosing that two loans from its California branch would result in a $50 million loss in the third quarter. Western Alliance's stock dropped 11% due to a fraud lawsuit against Cantor Group V, LLC.
As a result, the S&P 500 index closed down 0.63% on Thursday at 6,629.07 points; the Nasdaq Composite Index fell 107 points (-0.47%); and the Dow Jones Industrial Average closed down 0.65% on October 16 at 45,952.24 points.
As panic spread to the crypto market, Bitcoin fell to a low of $104,500 that day. According to Cointelegraph Markets Pro and TradingView data, the total market capitalization of cryptocurrencies dropped 5% to $3.58 trillion.
On Friday, Bitcoin's sell-off intensified, down 16.5% from its all-time high of $126,000 set on October 6, while the derivatives market experienced large-scale liquidations.
Long positions were liquidated for over $935.2 million, with Bitcoin accounting for $317.8 million. Ethereum long positions were liquidated for $196.3 million.
As shown in the chart, the total liquidation amount across the market reached $1.19 billion.
On Friday, trader Daan Crypto Trades stated: "Another day, with massive liquidations across the market. It's not just longs that get liquidated when the market drops." He added:
CoinGlass further indicated that Bitcoin's price was consuming liquidity around $105,000, with charts showing a significant number of orders still at $103,500.
This suggests that Bitcoin's price may further decline. After clearing liquidity in this range, a sustained rebound is expected.
Bitcoin fell below $105,000 today, failing to hold key support levels, including the 200-day moving average at $107,520.
Traders began to predict a stabilization range for Bitcoin's price.
Analyst Block_Diversity posted on the X platform, stating: "There are currently no signs of a Bitcoin reversal."
His accompanying image emphasized key focus points on the daily chart, including last Friday's low of about $101,000 on Binance, as well as support areas at $95,000 and $88,000.
Analyst Sykodelic added: "$104,000 is currently the most important high-timeframe support level," and expects this area to hold, as the daily RSI has dropped to its lowest level since the $74,000 low.
As Cointelegraph reported, with the crypto fear and greed index reaching an annual low and in a state of "extreme fear," this indicates that BTC's price may rebound from current levels in the short term.
Related: Ethereum attracted over 16,000 new developers in 9 months
Original: “How low will Bitcoin go? Regional U.S. bank stress is pushing BTC towards the $100,000 mark”
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