Bitcoin Below $100k — 2025 Bear Sentiment Deepens

Overview: Bitcoin drops beneath $100,000 amid growing risk aversion

Bitcoin has retreated below the $100,000 threshold, extending a multi-week decline that has erased a meaningful portion of the 2025 rally. The move reflects a combination of waning institutional demand, heightened volatility in derivatives markets, and renewed risk-off sentiment across global equity markets.

While Bitcoin remains higher year‑over‑year, momentum has stalled and market participants are reassessing exposures. In this update, we summarize the drivers behind the drawdown, technical and options market signals to monitor, and practical considerations for traders and longer‑term investors in 2025.

What drove the pullback?

The decline is not the consequence of a single event but rather several interacting factors that have reduced bid-side support:

• Institutional allocation deceleration — after sizable inflows earlier in the year, large allocators and corporate treasuries have moderated purchasing activity.
• ETF and spot demand softening — exchange-traded product flows, which were a significant source of liquidity in prior months, have shown signs of weakness.
• Derivatives-driven pressure — heavy selling and liquidation episodes in leveraged positions amplified downside moves.
• Macro cross-asset volatility — stress in growth-sensitive equity sectors increased correlations with crypto, eroding risk appetite.

Institutional flows and ETF dynamics

Institutional participation was a powerful tailwind earlier in the cycle, helping lift prices and compress volatility. In 2025, many institutional buyers have become more selective. Portfolio managers are rebalancing around higher cash yields and reevaluating timing for further allocations.

ETF inflows have historically provided a predictable and persistent demand source. When those flows slow or reverse, the market loses a structural buyer, increasing the likelihood that downward price pressure will persist until new demand emerges.

Derivatives and liquidation episodes

Derivatives liquidity and position dynamics have materially influenced the recent sell-off. Periodic large liquidations in leveraged positions can cause rapid moves as stop-losses and margin calls cascade, triggering further selling.

Options markets have also reflected elevated demand for downside protection, with significant interest reported in strikes below the $100,000 level. Heavy activity in protective puts around $90,000–$95,000 indicates that many participants are pricing in continued downside risk in the near term.

Macro backdrop: interest rates, equities, and sentiment

Macro developments in 2025 are central to the crypto narrative. The Federal Reserve’s guidance and the trajectory of rate cuts remain key variables for growth assets. Uncertainty about the pace and timing of rate easing has kept risk assets, including crypto and tech stocks, under pressure.

Earlier improvements in US equities following temporary fiscal or policy relief have not held, highlighting fragile investor confidence. When macro cross-currents shift toward risk aversion, correlations across asset classes tend to rise, diminishing crypto’s idiosyncratic drivers.

How macro risk transmits to crypto

• Tighter financial conditions reduce margin capacity and deter new speculative positions.
• Equity drawdowns often lead liquidity providers to reallocate or reduce risk exposure, affecting crypto market depth.
• Higher yields on cash-equivalent instruments can delay or displace allocations to volatile assets.

Technical picture and near‑term support zones

Technically, the move below $100,000 is meaningful because it represents a psychological and structural level that many market participants watch closely. Short-term technical momentum indicators have turned neutral-to-bearish, and moving average analyses show Bitcoin trading beneath certain long-term averages that previously acted as turning points.

Key zones to monitor include:

• Immediate support: $93,000 area — a near-term level that has seen prior buying interest.
• Lower support cluster: $90,000–$85,000 — a region where protective options activity and historical demand suggest potential stabilization.
• Resistance: $100,000 — now acting as an initial resistance after the breakdown.

Bear markets are typically marked by periods of choppy price behavior and false recoveries. Traders should prepare for swings in both directions and avoid assuming that short-lived rallies indicate a durable recovery.

Options and sentiment signals to watch

Options and OTC derivative flows often lead spot moves. Current market behavior shows:

• Increased demand for puts below key strikes, signaling hedging activity by institutions and sophisticated traders.
• Wider implied volatility premia, reflecting higher uncertainty and cost for downside protection.
• Concentration of open interest around specific strikes, which can create price magnets if large options positions are hedged dynamically.

Monitoring skew, term structure, and trade flow in the options market can provide early insight into the market’s directional conviction and where liquidity providers may be vulnerable.

Implications for traders and investors

For market participants, the current environment calls for calibrated risk management and clarity on investment objectives. Below are practical considerations, from short-term traders to long-term holders.

Risk management essentials

• Define time horizon and position size limits relative to an investor’s overall portfolio.
• Use stop-losses and size positions to prevent forced liquidations in volatile markets.
• Consider hedging with options if downside protection is needed without fully exiting exposure.
• Maintain liquidity buffers to take advantage of dislocations or meet margin requirements.

Strategic approaches for 2025

• Long-term/accumulation: dollar-cost averaging through periods of volatility can reduce timing risk, but maintain an allocation plan tied to your risk tolerance.
• Active traders: focus on shorter timeframes, tight risk controls, and watching order flow and derivatives signals for early reversal signs.
• Institutional allocators: reassess thesis drivers (macro, regulatory, yield alternatives) and align exposures with capital preservation rules.

Regardless of strategy, transparency in execution and disciplined allocation frameworks help reduce the emotional impact of volatile drawdowns.

Regulatory and market structure considerations in 2025

Regulatory developments continue to shape institutional participation. Clearer frameworks and product approvals that emerged in recent years increased access, but changing interpretations or enforcement actions remain potential sources of uncertainty.

Market structure improvements have enhanced liquidity and reduced some execution frictions, yet episodes of concentrated selling can still stress venues and derivatives platforms. Participants should be mindful of counterparty and settlement risks in stressed market conditions.

What to watch next

Key indicators that could influence the trajectory of Bitcoin over the coming weeks and months include:

• ETF and institutional flow data — renewed inflows would be a constructive sign for price stability.
• Options and derivatives flow — sustained demand for downside protection may keep pressure on spot prices.
• Macro indicators — rate expectations, inflation prints, and equity market performance will continue to influence risk appetite.
• On-chain metrics — long-term holder behavior, realized volatility, and exchange reserves can signal changing supply dynamics.

Outlook: cautious, data‑driven positioning

At present, the market exhibits characteristics common to the early stages of a bear regime: weakening inflows, concentrated hedging activity, and increased correlations with equities. That does not preclude localized rallies or months-long trading ranges, but it does suggest that investors should place a premium on risk management and monitoring flow indicators.

For traders and investors navigating 2025, staying informed on institutional flows, options market dynamics, and macro developments is essential. A disciplined, data-driven approach will help manage downside risk while keeping optionality for longer-term themes that could reassert themselves if demand conditions improve.

If you trade on exchanges or use derivatives, ensure you understand platform-specific liquidity considerations and maintain prudent position sizing. Markets are dynamic — adaptability and clear rules for entry, exit, and hedging will be key to managing performance in the current environment.

Disclaimer: This post is a compilation of publicly available information.
MEXC does not verify or guarantee the accuracy of third-party content.
Readers should conduct their own research before making any investment or participation decisions.