For the first time since 2018, Bitcoin prices ended October in the red. As a result, market sentiment is becoming increasingly fearful day by day. Volume has doubled in the past 24 hours to more than $212 billion, wiping nearly $250 billion from the market cap. Additionally, $90 billion quickly evaporated in the cryptocurrency market in the past hour, surprising traders around the world.
Analysts believe that BTC price is below $105,000 and could reverse to even lower levels below $100,000 if it breaks through the last line of defense at $102,000, where it rebounded last time.
Why the crypto market is depressed today – the main reasons!
Cryptocurrency markets extended their decline today as investors reacted to the Federal Reserve’s new hawkish stance and several other factors. Bitcoin and Ethereum were hit the hardest as no new ETF inflows were recorded, while outflows also remained negative. But why is there so much selling pressure in the market?
Fed’s hawkish outlook encourages risk aversion
The recent economic downturn began after the Federal Reserve signaled a gradual path to lower interest rates and warned that inflation remained high and policy easing could be delayed until early 2026. The remarks drove global investors away from risk assets, with both stocks and cryptocurrencies facing significant intraday losses.
Situation worsens with liquidation of over $400 million
More than $400 million in leveraged positions disappeared within hours, much of it from long bets on Bitcoin and Solana, according to liquidation tracker data. This wave of forced selling accelerated the economic downturn and had a knock-on effect across the derivatives market. Analysts say the decline reflects past flash liquidations when funding rates and open interest reached excessive levels and volatility increased.
Broad market weakness and profit taking
Beyond macro pressures, the pullback is also related to profit-taking after last week’s recovery rally. Traders who had built up positions near recent lows opted to lock in short-term profits amid heightened uncertainty. Meanwhile, sentiment indicators such as the Cryptocurrency Fear & Greed Index have shifted to “fear”, indicating a decline in investor confidence.
Altcoins will be hit the hardest
Altcoins bore the brunt of today’s market downturn, posting bigger losses than Bitcoin as liquidity thinned across major exchanges. Solana (SOL) plummeted below $176, down nearly 7% in a matter of hours, while Avalanche (AVAX) and Polygon (MATIC) fell between 8% and 10%. Cardano (ADA) and XRP also fell significantly, weighed down by widespread selling and diminished investor appetite for high-beta assets.
Traders reported that most of the pressure was due to prolonged liquidations and margin unwinding, especially on decentralized exchanges where thin liquidity increased volatility. The decline also followed weeks of heavy inflows into the top-performing altcoins, making them more vulnerable to sudden reversals. As risk sentiment weakens, analysts warn that the altcoin could fall another 5-8% if Bitcoin fails to maintain its key support near $102,000, with prospects for recovery dependent on overall market stability.
Conclusion: Is this the beginning of a bear market?
The decline has reignited concerns that the downtrend will be prolonged, but analysts are wary of calling it a full-blown bear market just yet. This correction appears to be primarily macro-driven and exacerbated by overleveraged positions and weekend liquidity declines rather than a collapse in on-chain fundamentals.
Whether Bitcoin can sustain above the psychological support of $100,000 will be key in determining near-term sentiment. A continued decline below this level could lead to further panic selling and drag the altcoin into a deeper correction zone. Conversely, if BTC stabilizes and regains $108,000 to $110,000, the market could regain its footing and attract new inflows from sidelined capital.
Essentially, the market remains volatile and not defeated. It’s a temporary storm in a long bullish cycle. However, traders should prepare for increased volatility and cautious accumulation in the coming days.
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