Bitcoin Crashes Below $100K – Is This the Start of a Major BTC Correction?

Bitcoin's bull run hits a wall as prices plunge below the $100K psychological threshold. Traders scramble as the king crypto shows rare weakness in its 2025 rally.

Blood in the streets or buying opportunity?

The dip triggers classic crypto market schizophrenia – panic selling versus diamond hands accumulating. Derivatives markets flash warning signs with liquidations spiking across exchanges.

Institutional sharks circling

Wall Street's crypto desks reportedly loading bids below $95K, because nothing pleases TradFi vampires more than retail investors' stop losses getting wrecked. Meanwhile, Bitcoin maximalists remind everyone this is exactly why you HODL through volatility.

With the Fed still playing interest rate whack-a-mole, crypto remains the only market where 20% swings count as 'normal technical corrections.' Buckle up.

Markets shrug off war signals

When BTC hit its all-time high, the market didn’t follow with full-blown euphoria. Technicals stayed cool, with no major overheating signals.

Though the derivatives side was buzzing with high-risk, aggressive bets.

Fast-forward thirty days, and BTC is down nearly 10% from that peak. OI has dropped to $67.71 billion, back to early May levels. So, calling this a classic leverage flush to wipe out weak hands wouldn’t be a stretch.

And the market seems to agree. Bitcoin’s spot exchange reserves keep grinding lower, now breaking multi-year lows. At the same time, BTC dominance has surged to 65.76% – the highest in four years.

Source: Glassnode

In short, the market is leaning defensive, but not exactly panicked.

In the last 72 hours, the U.S. bombed Iranian nuclear sites, Russia has floated nuclear support for Iran, and Iran’s parliament voted to close the Strait of Hormuz. That’s not your average news cycle.

Yet risk assets are barely reacting. S&P futures opened down just -0.5%, and Brent crude is up a modest +2.3%. For context, if markets were even beginning to price in a prolonged Strait closure, oil WOULD be surging past $120.

Structurally, the market is clearly leaning toward a short-duration conflict with limited macro fallout. But in doing so, is this calm laying the groundwork for a volatility shock in Bitcoin?

Bitcoin resilience amid mispriced macro risk

Despite tagging a 45-day low, total realized profits for the day came in soft, at just $753 million. It was well below the $1 billion threshold that typically signals widespread distribution.

This suggests holders are staying disciplined, and exit liquidity hasn’t been aggressively tapped. The HOLDing trend remains structurally intact, with FOMO still outweighing fear.

Compare that to past risk events, like the “Liberation Day” selloff where BTC plunged 16% in a week and realized profits spiked sharply as panic selling accelerated.

Source: Glassnode

Meanwhile, the Estimated Leverage Ratio (ELR) just dropped to -0.25 in under 72 hours, hitting levels not seen since the 2021 “China Ban” when ELR bottomed at -0.35. 

That lines up cleanly with Bitcoin’s 12% drawdown and a $13 billion wipeout in OI, confirming a clear deleveraging event.

But here’s the thing: The market still isn’t taking the geopolitical risk seriously. If leverage starts piling back in too soon, that next macro shock could hit a lot harder than people expect.

In that setup, reloading leverage here is structurally risky. One macro jolt, and bitcoin could unwind deeper, with $98k just the first stop.