Bitcoin Price Drop to $100,000 Likely, But Market Reset May Stabilise

Bitcoin has seen a 4.50% decline this week, potentially heading towards $100,000, but data suggests it may not stay there for long. Key metrics indicate strong support around $96,000–$104,000. A substantial $3.7 billion wipeout in futures open interest suggests a market reset that could stabilize prices.

Bitcoin’s current price metrics are showing some interesting trends, with the cryptocurrency dropping about 4.50% this week. Many analysts predict it could dip to the $100,000 mark again in the coming days. However, the data hints that any prolonged retreat below this figure may not stick around for long. For instance, in a recent update from CryptoQuant, they highlighted the Net Realized Profit/Loss (NRPL) chart, showing moderate profit taking at these levels, but way lower compared to the peaks seen back in March and November 2024.

These earlier peaks were associated with intense sell-offs marking the market tops, but the current profit taking indicates a restrained market and a hopeful upward move is still on the cards. More good news comes from another vital metric: the short-term realized price currently standing at $96,000. This reflects the average price at which Bitcoin was obtained recently, acting as a significant support cushion. So, should Bitcoin take a tumble below $100,000, it’s likely that the $96,000 level will draw in buyers and keep further losses in check.

Historically, Bitcoin has tended not to stay below the short-term realized price for extended periods during bullish trends, suggesting that the conviction of holders remains robust. Crypto trader Altcoin Sherpa has voiced optimism about a price recovery soon, emphasising a solid support zone between $102,000 and $104,500. This range is notable as BTC previously consolidated there before making higher gains, and Sherpa believes it could lead Bitcoin north of $107,000 in just a week.

In addition, Titan of Crypto, a well-respected technical analyst, pointed out that Bitcoin is drawing close to another pivotal technical support level. He stated, “BTC pulling back toward the daily Kijun ~$102,700. This area previously held and could act as a solid base for the next move.”

Adding to this analysis, the Bitcoin futures market experienced a significant overhaul in recent days with a $3.7 billion wipeout in open interest, as the price dropped from $108,000 to $104,500. This wipeout is being seen as a healthy reset, indicating the liquidation of overleveraged positions which tends to reduce market exuberance.

High open interest typically points to over-leveraged trading that can increase price volatility. So when a minor price drop triggers a wave of liquidations, it helps to stabilise the market as those speculative positions are eliminated.

But just a heads up — this article doesn’t offer investment advice nor recommendations. The world of trading is loaded with risks, and readers should definitely do their own homework before making any moves.