Bitcoin (BTC) has broken below its 200-day moving average at $109,800, a key technical level that has historically acted as support. A decline could signal further downside for the cryptocurrency.
The 200-day moving average is one of the most widely followed indicators that may be used to define a long-term trend, and also acts as a support level for bitcoin in this case.
Source: TradingView
The cryptocurrency fell 3.24% overnight and was trading at $103,900 Tuesday morning. The sell-off wiped out over $1.36 billion across major cryptocurrencies, including Bitcoin, Ethereum, and Solana. Nearly 90% of the liquidated positions were long trades, totaling $1.22 billion.
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Data from CoinGlass shows that CME Bitcoin open interest fell by 9.39% in the past 24 hours, reflecting fewer outstanding futures contracts as traders closed positions amid the market dip.
Historically, sharp drops in CME open interest have often coincided with market bottoms, suggesting capitulation and widespread position closures.
Today’s sell-off follows last week’s wave, which also saw massive liquidations shake the markets immediately after hawkish comments from the U.S. Federal Reserve. After its rate cut, the Fed signaled that further cuts may not come soon, catching investors off guard and sending Bitcoin down roughly 3% to around $107,000.
What’s Next for Bitcoin?
Analyst Ted Pillows noted that Bitcoin lacks strong support until the $100,000 level, suggesting the cryptocurrency could retest that zone. If it breaks below $100,000, a further pullback toward $92,000 is possible, where a CME gap may come into play.
Why This Matters
Breaking below major support levels like the 200-day moving average and $100,000 could push Bitcoin sharply lower, trigger more liquidations, and rattle investors who have been betting on a sustained rally.
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$100,000 acts as a psychological and technical support level. If Bitcoin breaks below it, traders may expect larger pullbacks, such as toward $92,000, where a CME gap could influence price action.
Liquidations happen when leveraged traders’ positions are forcibly closed because the market moves against them. Large-scale liquidations, like the $1.36 billion seen recently, can amplify price declines and trigger further selling.
Bitcoin often reacts to macroeconomic signals, including Fed interest rate changes. Hawkish remarks or unexpected policy signals can reduce risk appetite, causing crypto markets to sell off.
