Bitcoin’s recent fall below $104,000 sent the market into “extreme fear” territory for the first time since April.
Bitcoin (BTC) weakened significantly over the weekend, zigzagging between $116,000 and $108,000 for several days before falling below $104,000 on Friday, October 17th.
The decline has sent markets into “extreme fear” for the first time since April, leading many observers to speculate on how long the bullish cycle will last, with some warning of more losses.
A dangerous line in the sand
In his “Big Sunday Report,” crypto trader Dr. Proffitt told X’s more than 439,000 followers that he should have used the 115,000-125,000 zone to build short positions, warning that the market was now “very bearish.”
He wrote that he had been “flagging” that area since the end of August “for additional short sales,” noting that Bitcoin reached “126,000, 1,000 points above my best-end scenario of 125,000” before falling on October 10 and as low as $101,000 on some trading platforms.
Analysts point to the centrality of market sentiment and clearly write:
“Markets are driven by greed. It’s rare to see so much greed in the market right now. I’m talking about both the bear side and the bull side.”
His setup hinges on a certain technical threshold, a decisive limit below $101,700.
“By breaking below $101,700, Bitcoin will fall below the magic bull line, finally confirming the bear market and silencing the bulls for good!” Dr. Proffitt wrote.
The post also cited liquidity mechanics as a culprit, noting that recent short selling delays, liquidations around $116,500, and dense positions among short-term holders have made the price structure vulnerable.
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Furthermore, using a short-term holder realized price of $112,500, the analyst indicated that many recent buyers have been in losses, and an additional 5-10% drop in BTC could put further pressure on the market.
Sentiment, macro events and market structure
This weekend’s price movements also reflected this sense of caution. At the time of writing, the leading cryptocurrency was trading around $110,700, up 3.5% in the past 24 hours, but down by the same amount over the past seven days, according to CoinGecko data. The 14-day decline is closer to 10.6% and the 30-day decline is smaller at 4.1%.
Dr. Proffit’s warning arrives as widespread sentiment worsens. The Fear and Greed Index is at its lowest level since April, and about $900 billion in market value has been lost in the past few days, according to an October 17 report. Some analysts say the medium-term uptrend remains strong if key supports hold, while others say liquidity operations related to ETFs and leveraged positions are exposing the market to significant directional movement.
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