Bitcoin Struggles Below $99K Amid Macro Headwinds as Key On-Chain Indicators Flash Mixed Signals
Bitcoin is currently trading under $99,000, which is down about 3% in the last 24 hours. This is because the world's most popular crypto
Quick overview
- Bitcoin is currently trading under $99,000, down about 3% in the last 24 hours due to broader market selloff and AI profitability concerns.
- The Nasdaq Index fell 2.3% after warnings about AI profitability, contributing to Bitcoin's drop of 6.5% after reaching $105,000.
- Technical analysis indicates critical support for Bitcoin between $100,000 and $101,000, with potential for a bounce if it holds above these levels.
- Despite recent weakness, some metrics suggest Bitcoin may be undervalued, with predictions of a possible rise to $117,958 by mid-December if economic conditions improve.
Bitcoin BTC/USD is currently trading under $99,000, which is down about 3% in the last 24 hours. This is because the world’s most popular cryptocurrency is following the trend of other risky assets that are losing value because of worries about the profitability of the artificial intelligence sector and the ongoing uncertainty in the economy after the long US government shutdown.
Broader Market Selloff Drags Bitcoin Lower Amid AI Profitability Doubts
The current drop in the cryptocurrency’s value is part of a larger trend of risk assets losing value. The Nasdaq Index, which is full of tech stocks, fell 2.3% on Thursday after Palantir CEO Alex Karp warned that the artificial intelligence business would not be profitable. His warning that not every AI deployment will “create enough value to justify the actual cost” sent shockwaves across technology companies. Palantir, Intel, and CoreWave all lost more than 6% of their value in one day.
Bitcoin did the same thing, dropping 6.5% after hitting the $105,000 mark on Wednesday. The sudden change caused almost $350 million in liquidations of leveraged bullish BTC holdings, which helped the loss of the important psychological support level of $100,000. Investors were also let down by firms that focus on consumers, like Disney, whose shares fell 8% after quarterly earnings that were worse than expected. This was similar to what happened with DoorDash, Dollar Tree, and Starbucks.
Federal Reserve Policy Expectations Shift as Economic Data Remains Murky
Expectations for monetary policy have changed a lot in the last several weeks. The CME FedWatch Tool says that the anticipated chance of the Federal Reserve lowering interest rates below 3.5% by January 2026 has dropped substantially from 49% on October 13 to barely 20%.
The longest government shutdown in history, which lasted 43 days, has left investors in the dark about the basics of the economy. Karoline Leavitt, the White House Press Secretary, said that some economic reports from October might not be made public. Lael Brainard, a former vice chair of the Federal Reserve, said that AI investments are hiding structural flaws “under the hood” as the economy as a whole deals with sluggish demand.
BTC/USD Technical Analysis: Critical Support Test Between $100K-$101K
According to technical analysts, the 4-hour chart shows a symmetrical triangular pattern, with BTC coiling in a range that is getting smaller and has support near $101,000 and resistance closer to $104,000. If this triangle breaks out above it, it might lead to retests of the $108,000–$112,000 range. On the other hand, if the price drops below $100,000, it might start a long correction period.
Glassnode, an on-chain analytics company, says that Bitcoin is now trading between two important Supply Quantiles Cost Basis levels. The 0.85 quantile at $108,500 could act as a barrier, and the 0.75 quantile near $100,600 could act as support for prices that go down. Glassnode said, “These levels have historically acted as support and resistance, and a break of either one is likely to set the next trend.”
On-Chain Metrics Signal Potential Undervaluation Despite Recent Weakness
Some signs point to Bitcoin getting ready to bounce again, even though the price has dropped. Santiment, an analytics company, said that since August 11, BTC has dropped about 15%, while the S&P 500 and Gold have risen 7% and 21%, respectively. Because Bitcoin has been closely linked to these assets for the previous four years, Santiment said that “BTC is arguably being undervalued.”
Bitcoin’s Net Unrealized Profit ratio has dropped to 0.476, which is a level that has historically suggested short-term market bottoms. This statistic has caused three reversals in 2024, and the average rebound from this zone over the next month has been 15% to 25%.
Bitcoin Price Prediction: Critical Juncture Ahead
Analysts stress that there isn’t any proof of Bitcoin-specific selling pressure or insider distribution. PlanB, the inventor of the stock-to-flow model, says that long-term supply pressure comes mostly from holders who were active between 2017 and 2022, not from buyers who have recently taken profits.
Outlook for the next week or two: Bitcoin is anticipated to stay between $96,000 and $104,000 while traders wait for more clear economic data. If the price goes above $104,000, it might go up to $108,000–$112,000. If it doesn’t hold $98,000, it could test the $95,000–$96,000 support zone.
In the medium term (1 to 3 months), technical estimates say that Bitcoin might hit $117,958 by mid-December, which would be about 14% higher than where it is now, providing that macro visibility improves and institutional demand stabilizes.
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