Bitcoin Plunges to $98,900 Lows: Is the Bear Market Confirmed? Key Levels to Watch

Bitcoin Plunges to Four-Month Lows Amid Bear Market Warnings – Key Levels to Watch

Bitcoin (BTC) tumbled to four-month lows near $98,900 on Tuesday, with its price hovering around $101,721 at press time. Analysts warn that the flagship cryptocurrency may be entering a full-blown bear market, driven by intensifying selling pressure and fading bullish momentum.

Market data reveals Bitcoin has carved out a new lower trading range on shorter timeframes. Traders are closely monitoring critical support zones that could determine whether this pullback evolves into a prolonged downturn or finds a floor for recovery.

Signs Point to a Shifting Trend

Private wealth manager Swissblock noted that Bitcoin’s risk-off signal has begun to destabilize amid recent heavy selling. While the indicator remains in a low-risk regime, a shift to high-risk territory would confirm a structural bearish transition rather than a temporary correction.

Supporting this cautious outlook, on-chain analytics firm Glassnode reported a sharp 62% drop in monthly funding rates for Bitcoin perpetual futures. Rates fell from $338 million in mid-August to just $127 million by Tuesday. This decline highlights diminishing speculative appetite, as traders hesitate to pay premiums to hold long positions – a classic precursor to market tops.

“Bear market confirmed,” declared popular analyst Mikybull Crypto on X, pointing to a breakout in USDT dominance from an inverse head-and-shoulders pattern on the weekly chart. Historically, similar breakouts have preceded extended crypto winters, as investors flock to stablecoins like Tether (USDT), currently trading at $1, signaling widespread risk aversion.

Rising USDT dominance typically exerts downward pressure on BTC and altcoins, as capital exits volatile assets and parks in safe havens. This flight to stability often amplifies short-term declines.

Critical Price Levels in Focus

The latest sell-off has erased 20% from Bitcoin’s all-time high above $126,000. The price has now breached the short-term holders’ cost basis near $113,000 – a level that has historically marked the start of mid-cycle bear phases as recent buyers capitulate.

Glassnode emphasized that Bitcoin has lost support at the 85th percentile cost basis around $109,000. The next major defense line sits at the 75th percentile near $99,000, which has provided reliable bounces during past pullbacks.

Traders are also eyeing the October 10 low near $103,500, breached during a broader market crash. Below that, the $98,000 zone – site of June’s Middle East conflict-driven dip – emerges as pivotal. Liquidation heatmaps from CoinGlass show a dense cluster of leveraged positions here, marked by intense yellow shading. A breakdown could trigger a cascade of forced liquidations, potentially driving BTC toward $95,000, where the next liquidity pool awaits.

On the upside, bid walls are stacking up near $102,500, with stronger accumulation between $103,000 and $105,000. A daily close above $100,000 – the psychological benchmark – would be essential to restore bullish confidence.

Broader Implications for Crypto Investors

This downturn arrives amid broader market jitters. Long-term holders have begun distributing supplies, adding to the bearish supply overhang. Combined with short-term holder capitulation, these dynamics could accelerate declines if sentiment sours further.

Some analysts caution that a sustained break below $100,000 might open the door to $72,000 in a worst-case scenario, especially if macroeconomic headwinds like rising interest rates or regulatory scrutiny intensify.

Yet, Bitcoin’s history is replete with sharp corrections followed by explosive rallies. The current setup echoes previous cycles where fear capitulation paved the way for renewed accumulation by strong hands.

What Should Traders Do Next?

• Monitor USDT dominance closely – further gains signal deepening risk-off behavior.
• Watch liquidation clusters at $98,000 and $95,000 for potential volatility spikes.
• Track on-chain metrics like realized profits/losses and holder behavior for signs of exhaustion.
• Consider dollar-cost averaging for long-term believers, but maintain strict risk management.

As Bitcoin navigates this turbulent phase, the battle between bears and bulls will likely hinge on these technical levels and shifting investor psychology. Staying informed and avoiding emotional decisions remains key in volatile markets.

With the crypto winter narrative gaining traction, the coming weeks will be crucial in determining whether Bitcoin can reclaim $105,000 or succumb to deeper losses. One thing is clear: volatility is far from over.

Georgi Minev publication: "Bitcoin Plunges to $98,900 Lows: Is the Bear Market Confirmed? Key Levels to Watch" was written for 24crypto.news

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