Bitcoin and Ethereum plunge under key levels

The cryptocurrency market is facing a significant downturn following a sharp reversal that wiped out most of its recent gains. Bitcoin dropped below $109,000, while Ethereum slipped below $4,000, causing high volatility and forced liquidations, leading to a cautious atmosphere among traders.

The current decline has been described as a “post-FOMC hangover” by Timothy Misir, the head of research at BRN. Bitcoin’s price plummeted to as low as $108,652, triggering a wave of selling pressure and increased volatility in the market.

Recent data shows that the short-term holder realized price of Bitcoin fell below $109,700 for the first time in months, indicating distress among recent buyers. Ethereum also experienced a similar decline, reaching its lowest level since early August, while Solana dropped below $200.

CryptoQuant analyst JA Maarturn highlighted that the sell-off has led to a significant cleanup in risk-on positioning, with billions of dollars in leveraged altcoin and Bitcoin bets being liquidated.

Despite the market downturn, analysts at Matrixport believe that the derivatives markets are showing mixed signals for crypto investors. They pointed out key on-chain thresholds that could signal major breakouts and highlighted the potential for Bitcoin to form a symmetrical triangle, a pattern that often precedes decisive moves.

However, with option traders closely monitoring the $110,000 zone and seasonal volatility patterns, any deviation from the norm could result in an earlier breakout or deeper correction. The analysts emphasized that emerging patterns in skew, open interest, and volatility suggest that the next phase of the market cycle may unfold differently from previous trends.