Bitcoin has entered a bearish phase, according to analyst Doctor Profit, with liquidity issues and extreme fear gripping the crypto market. The slump is driven by structural weaknesses exposed by technical breakdowns, including the loss of its 50-week moving average (EMA50W) for the first time in this cycle. This signals deeper market weakness, further reinforced by a death cross that completed following bearish divergence during summer trading.
CryptoRank reports Bitcoin at $86,999 with Ethereum rising to $2,842, despite both experiencing sharp drops.
The Fear and Greed Index stands at 19, indicating extreme fear. Doctor Profit highlights the increasing risk of a liquidity crunch and points to the potential for a repeat of the Credit Suisse collapse in 2023.
Market metrics reveal significant volatility. Bitcoin’s market capitalization has dropped by 30%, followed by substantial institutional liquidations after October’s price crash. Trading firm liquidations are also reported, further amplifying market strain.
QCP Broadcast reports that Bitcoin is down 30% before a brief recovery over the weekend. While Dovish Federal Reserve comments have bolstered expectations for a December rate cut to 75%, market caution persists. Derivatives activity shows a preference for calls, indicating tactical positioning with strike levels concentrated between $85,000 and $200,000. Negative funding rates also point to unwinding of leveraged long positions, reducing downside exposure while confirming ongoing market repositioning.
Amidst this turmoil, stock insiders continue their selling trends, adding further pressure on correlated financial sectors.