``` Capital fleeing and panic rising—is Bitcoin's most pessimistic scenario a drop below $70,000? ```

``` Capital fleeing and panic rising—is Bitcoin's most pessimistic scenario a drop below $70,000? ```

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Bitcoin falling below the $100,000 mark has triggered market turbulence, putting this globally momentum-driven trading asset to a severe test. Analysts warn that if U.S. stocks continue to decline, Bitcoin may retest the $70,000 support level or even briefly fall below it.

Last Friday, Bitcoin briefly fell below $95,000, erasing its 30% year-to-date gain. Compared to the all-time high of $126,000 set on October 6, Bitcoin has lost about 25% of its value within just a month. Ethereum has suffered as well, with its losses from the August peak widening to more than 35%.

On Monday, Bitcoin rebounded, but the market is widely wondering: Is this another "washout" correction, or the beginning of a new deep bear market?

Liquidity Crisis Triggers Chain Reaction

Institutional participants have broken down this plunge into a "two-stage decline":

The first stage comes from a sudden macro risk. Last month, trade tensions unexpectedly escalated, leading to a simultaneous sell-off of global risk assets. Hex Trust CEO Alessio Quaglini said: “The turning point for Bitcoin was on October 10, followed by a full-scale liquidation cascade in the next few days, and all leveraged positions were wiped out.”

The second stage was liquidity drying up. After the "10/10 crash," liquidity in the Bitcoin market thinned dramatically, so even small trades could cause intense volatility. Peter Chung, head of research at Presto Research, noted: “Liquidity became extremely thin. Coupled with end-of-cycle fear, the market was pulled down further.”

Moving into November, a worsening macro environment exerts more pressure on the market.

Expectations for a December Fed rate cut have subsided, while the U.S. government shutdown has paused economic data releases, further damaging market sentiment. Tim Sun, senior researcher at HashKey, pointed out that liquidity tightening has hit ETFs particularly hard. The Bitcoin ETFs, which had previously attracted over $100 billion in capital, are now facing outflows.

Technical and Fundamental Pressure: Will $70,000 Be Broken Under the Most Pessimistic Scenario?

The market is worried that if there is further profit-taking in stocks, crypto assets may face a second wave of concentrated selling.

BTSE exchange COO Jeff Mei warns that Bitcoin still exhibits typical risk asset characteristics. With AI valuations under scrutiny and rate cut prospects in doubt, “further price declines for Bitcoin may be inevitable.”

Quaglini of Hex Trust says bluntly: "We must honestly face the fact that this correction may not be over yet. If the stock market continues to fall, we could easily retest the $70,000 low, or even briefly break below it."

According to a previous Wallstreetcn article, Matthew Hougan, CIO of Bitwise Asset Management, believes “People are worried that the four-year cycle may repeat, and they do not want to go through another 50% correction. Therefore, they are preemptively exiting the market to avoid risk.” This fear of history repeating itself may in itself constitute selling pressure.

However, Quaglini also emphasized that this round of selling is fundamentally different from past crises.

"This is not 2022—there's no credit contagion, no chain bankruptcies, no systemic failures. Once conditions stabilize, we still expect Bitcoin to reach new highs within 12 to 18 months."

Despite short-term pressure, some long-term investors remain optimistic about Bitcoin's fundamentals. Bitwise CEO Hunter Horsley believes the current price level is attractive for strategic investors.

"From the current price level, this is a reasonable entry point, and the setup is quite favorable," Horsley said. He revealed that the number of customers investing in crypto at Bitwise in the past quarter has surpassed any other period in the company's seven-year history.

Chung advises retail investors to avoid attempting to time short-term fluctuations and adopt a dollar-cost averaging strategy, focusing on understanding the fundamentals of the Bitcoin and Ethereum networks rather than chasing headlines. Sun reminds long-term buyers to wait for macro signals instead of technical ones, as Bitcoin's upside potential depends on the sustained easing of global liquidity.

Risk Warning and DisclaimerThe market carries risks, and investments should be made cautiously. This article does not constitute personal investment advice, nor does it take into account individual users' unique investment objectives, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular circumstances. Any investment made accordingly is at your own risk. ```