Bitcoin enters bear market! How low can it go?
Risk assets have tumbled as markets dialed back expectations for a Fed rate cut in December.
Fed funds futures now place the odds of a 25-basis point US rate cut at a coin toss (50-50), drastically lower than the 93% chance accorded a month ago (Oct 14), as Fed officials publicly sought to cool such expectations.
The S&P 500 fell 1.66% on Thursday, with futures still dipping at the time of writing.
The CoinDesk 20 Index, which measures the performance of top digital assets, is down over 4%.
Gold was not spared as it fell 0.6% Thursday, though its safe haven allure likely limited the drop.
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Bitcoin hits 6-month low
On Friday, the world's oldest cryptocurrency briefly dipped below $96,000 to register its lowest spot price since May 7th.
Using intraday prices, Bitcoin has fallen as much as 24% from its all-time high of $126,195.50 posted on October 6th.
A drop of more than 20% from its recent high fits the textbook definition of a "bear market".
Bitcoin breached this "bear market" threshold using the conventional daily closing prices between October 6th's record high through November 13th.
The steep drop also blew past critical support levels for Bitcoin that were being monitored by traders and investors:
psychologically-important $100k mark
50-week simple moving average
lower limit of multi-year regression bands (weekly timeframe) that preserved the bull run since 2023 - though confirmation may only come via a weekly close below the lower band.
Barring a remarkable rebound, Bitcoin is on course for its 5th weekly drop in the past six weeks.
How low can Bitcoin go?
For the immediate term, Han Tan, Bybit Learn's Chief Market Analyst, is eyeing the $95,000 mark - a psychological level earmarked a week ago during Bybit Learn's Week Ahead Preview Livestream on Nov. 7th.
The $95k region was also a key battleground between bulls and bears back in late-April through early-May 2025; with bears perhaps more eager to revisit that site.
On other hand, Bitcoin bulls need to see prices clamber back up above the $100k psychological level to take the edge off the current selloff.
Looking at the ETF space, the $89,613 level stands out, according to K33 Research. That's the beakeven point (average cost basis) for all inflows into US spot Bitcoin ETFs - which is to say, it's the average entry price for those who bought into Bitcoin exchange-traded funds listed on US exchanges.
Despite the ongoing price drop, the iShares Bitcoin Trust ETF (ticker: IBIT) still shows a 1-week net inflow of $168.35 million as of Nov. 13th, though that is in stark contrast to the net outflows of $751.33 million from the biggest Bitcoin-backed ETF over the past month.
With crypto ETF afficionados broadly lacking the will to buy-the-dip just yet, Bitcoin prices may remain susceptible to further declines, especially if risk-off sentiment continues to dominate the macro environment amid lingering uncertainties surrounding the Fed's path towards lowering US interest rates.