Swyftx Squawk 🦜 Bitcoin: To $100k or Not to $100k

After an explosive start to October, the crypto market has settled into a holding pattern.

The biggest liquidation event in history sent shockwaves through investors, with prices plummeting double-digit percentages in a matter of minutes.  

There’s been a recovery since then, yes, but for the most part, top digital assets are tracking sideways. BTC is holding $107-110k USD, Ethereum is lingering below $4k USD and Solana is nudging, but falling short, of $200 USD. 

It’s been a slow bleed for most of the week, with no major movements or news arresting the market lull outside of a brief recovery earlier this morning. 

Crypto Total Market Cap

So, can we expect this deadlock to be broken? Or will the malaise continue spreading, causing BTC to fall below $100k USD for the first time in months?

Fear is running the show

I think it’s forgivable for the market to be somewhat trepidatious after the early October crash – and mood has improved very little since then. At the time of writing, Alternative.me’s Fear and Greed Index is reading 28, just a touch above Extreme Fear.

And looking at the chart over time, we can see Fear has reigned supreme ever since the liquidation.

For those unfamiliar, the Crypto Fear & Greed Index combines a range of market indicators into a single score that reflects overall investor sentiment: from Extreme Fear (0-25) to Extreme Greed (75-100).

Traders in the crypto market often use this index as part of their technical analysis due to its simplicity. Of course, you should never rely on any one signal to inform a strategy, but it offers a simple way to gauge crowd psychology, which can be a key driver of price movements in digital assets.

Historically, periods of Extreme Fear and Greed don’t last too long. Looking back to earlier this year, we saw Alternative.me’s index maintain a sub-50 reading between February and April. Following this, the market rebounded – in particular Ethereum – resulting in ETH and BTC setting new all-time highs. And on the flipside, a few days before the October liquidation event, the index flashed Extreme Greed.

So while there may be a few weeks or months left of cautious, risk-averse investing in the crypto market, the past tells us that extreme conditions eventually reverse. 

It’s worth remembering that Fear and Greed Index readings don’t directly correlate with crypto prices. Broader macroeconomic conditions, liquidity, and network activity all play significant roles. However, as a rule of thumb, they are closely linked and can give us a useful, at-a-glance understanding of market sentiment.

Bitcoin to below $100k USD?

Although chances are the market won’t remain fearful forever, in the medium-term Bitcoin could face more volatility.

A quick look at Bitbo’s Volatility Index confirms this – despite the market settling after the flash crash, volatility is yet to trend downward. The lingering volatility likely stems from the scars of October’s liquidation, as investors price in greater-than-anticipated risk from leveraged BTC positions. 

Pair this with negative sentiment and low market liquidity, and you’ve got a vortex of bad conditions for Bitcoin in the near-term.

Analysts are already calling for an end to BTC’s six-figure run. Just this week, Standard Chartered analysts claimed that Bitcoin falling below $100k USD was ‘inevitable’, and could come as soon as this weekend.

Okay…so the next few weeks are projecting a little grimly. But it’s not all doom and gloom. 

In that same quote, Geoff Kendrick from Standard Chartered went on to say that a potential dip below $100k USD might be ‘the last time Bitcoin is ever’ at that price.

So, like most things in life, the answer to ‘Bitcoin: to $100K or not to $100K?’ is simple — it’s complicated.

 Swyftx Flows 

The buy-to-sell ratio for unique Swyftx orders is nominally >$20,000 AUD (rolling data over the last 7 days, captured at 09:00 am AEST).