Bitcoin Faces Downside Risk: Could $72,000 Be Next?
Bitcoin (BTC) recently dipped below the $100,000 mark, sparking concerns about a potential further decline.According to on-chain analytics firm CryptoQuant, a failure to maintain support around $100,000 could lead to a price drop to $72,000 within one to two months.
Support Level Under Pressure
Julio Moreno, Head of Research at CryptoQuant, warns, “If the price fails to hold the $100,000 area and breaks out on the downside, there is a higher risk of reaching $72,000 within a one- to two-month period.”
The broader crypto market also experienced meaningful losses yesterday, with the GMCI 30 index, tracking the thirty largest crypto assets, falling by over 10%.
Moreno attributes the current weakness to declining demand since the October 10 liquidation event, which saw over $20 billion in leveraged positions wiped out. He notes that spot demand for Bitcoin has continued to decrease, and American investors are exhibiting increased caution, evidenced by negative inflows into Bitcoin ETFs.
Broader Market context
This downturn aligns with a wider trend of risk aversion across financial markets. Geoffrey Kendrick, Head of Digital Asset Management at Standard Chartered, previously predicted a drop below $100,000 following the October liquidations, though the decline took several weeks to materialize.
Gerry O’Shea of crypto asset manager Hashdex points to concerns surrounding interest rates, credit markets, and stock valuations as contributing factors to the downward pressure.
However, O’Shea emphasizes that breaching the $100,000 level doesn’t invalidate bitcoin’s long-term potential. “The trend of ETF inflows and company adoption remains very strong this year,” he stated, suggesting these structural factors could still propel BTC to new all-time highs in the coming months despite the current challenges.
