Bitcoin fell below a key support level that had prevented a decline towards $100,000, amid weakening momentum in tech stocks.
The leading cryptocurrency fell below $106,000 during Asian trading hours, penetrating the level that had offered support several times in recent weeks, according to CoinDesk data. Major Altcoins such as Ether , and Solana with SOL sliding to $157, the lowest since August 3. Ether also fell to its lowest since August, with a bearish crossover of major moving averages indicating strengthening bearish momentum and XRP hitting a three-week low.
The BTC split shifts the focus to the $100,000-$101,000 area, according to Markus Thielen, founder of 10x Research. A breach could open the door to a deeper test near $94,000, or even a full retracement towards $85,000, the maximum pain zone that also corresponds to strong on-chain support, Thielen said in a note to clients.
“While such a move would be extreme, the downside risk remains contained as long as bitcoin maintains above its current downtrend line,” he added.
BTC’s dour price action follows diminishing chances of rapid Fed rate cuts and signs of a bullish reversal in the dollar index, which tracks the greenback’s value against major currencies.
Mag 7 tilt flips
Additionally, there are signs of exuberance in the so-called “Magnificent 7” stocks – Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla – which are typically seen at major market tops.
“The put-call asymmetry in the Mag7 complex has reversed for the first time since December last year (i.e. the implied volatility of calls traded on puts). This phenomenon has only happened a few times. This move implies that investors are massively positioned for continued upside,” analyst Neil Sethi said on X, citing Goldman Sachs.
“Historically, these weak asymmetries have tended to coincide with short-term consolidation or reversals when optimism peaks,” Sethi added.
Increase in Oracle CDS
At the same time, Oracle-linked credit default swap (CDS), which measures the cost of insuring against a potential default, surged following the company’s massive disclosures of AI investments in the third quarter – reaching levels not seen outside of periods of significant macroeconomic stress.
Some analysts say this reflects investor anxiety over soaring AI spending. AI optimism has been a key driver of the bull market in stocks and broader risk assets, including cryptocurrencies, since 2023.
All things considered, bulls might be better off being cautious rather than overly exuberant.
