Bitcoin (BTC) and the broader crypto market have entered a downturn after the Federal Reserve’s latest 25 basis points interest rate cut, triggering a renewed debate among traders: is this a simple sell-the-news scenario, or are we witnessing the onset of a prolonged downturn possibly signaling another crypto winter?
Currently, BTC is grappling to maintain levels above $110,000, reflecting trader uncertainty as volatility escalates and market sentiment begins to shift. The typical post-liquidity optimism that often accompanies such policy changes was quickly overshadowed by selling pressure, indicating that markets are likely recalibrating after a phase of aggressive speculative trading and notable liquidations earlier this month.
In the wake of this sharp pullback, market analysts find themselves divided. Some posit that this slide is merely a normalization of market dynamics following a significant macro event, echoing previous cycles where risk assets experienced a dip before continuing their upward trajectory. Conversely, others caution that the breach of key technical levels could forewarn of a more substantial decline should market demand not reappear swiftly.
As Bitcoin hovers at this pivotal support level amid evolving macro conditions, the upcoming weeks could prove critical. Whether this development signifies a mere temporary liquidity flush or the initiation of a broader risk-off sentiment may well outline the forthcoming chapter in the crypto landscape.
Short-Term Traders Lead Sell-Off While Long-Term Holders Remain Steady
Insights from CryptoQuant analysis reveal that the dramatic market drop on October 30th was primarily instigated by short-term traders rather than long-term investors. As volatility spiked, over 10,000 BTC flowed into Binance—often a precursor to sell pressure—as rising exchange inflows typically signal heightened selling interest. However, a deeper dive into the on-chain metrics paints a contrasting picture.
The Spent Output Age Bands (SOAB) metric indicates that the vast majority of this influx—10,009 BTC—originated from coins held for less than 24 hours. Essentially, this outflow was predominantly driven by short-term, emotionally reactive traders rather than steadfast long-term holders.
Conversely, inflows from long-term holders—those who have retained their assets for six months or more—were negligible. The market’s most enduring participants, often labeled as “diamond hands,” refrained from panicking, refusing to transfer BTC to exchanges or contribute to the downturn.
This divergence in behavior is significant; it highlights that the recent sell-off reflects a liquidity trap rather than a fundamental shift in long-term investment sentiment. Essentially, market psychology rather than underlying fundamentals has driven this latest move.
Far from indicating the dawn of a crypto winter, this trend aligns with past shakeout patterns observed prior to larger market continuations. When short-term participants capitulate while long-term holders remain committed, it typically signals a period of market cleansing rather than structural weaknesses, suggesting a solid foundation persists.
Bitcoin Stabilizes in Mid-Range on 3D Chart
At present, Bitcoin trades around $109,800 on the 3-day chart, consolidating after a month marked by sharp macro reactions and a series of leveraged sell-offs. Despite the prevailing downside pressure, the underlying structure remains unbroken, with BTC still sustaining levels above the 100-period moving average (green line) and comfortably above the 200-period moving average (red line), indicating a bullish long-term trajectory.
The price currently wavers between $108,000 support and a crucial resistance zone at $117,500, which has historically served as a supply barrier throughout this consolidation phase. Efforts to surge past $117,500 have consistently met resistance, solidifying it as the Point of Control and a vital level for bulls to overcome to regain momentum.
On the downside, the $108,000–$105,000 range has repeatedly functioned as a demand zone, supported by buyers stepping in during market pullbacks. A breach below this area could heighten the risk of a deeper correction towards $100,000–$102,000, where structural support and prior breakout levels converge.
