Bitcoin Drops Below $110,000 Support - But This Critical Risk Signal Says Market Remains Safe
Bitcoin just breached a key psychological barrier - but the market's vital signs suggest this is no cause for panic.
Breaking Through Support Levels
The $110,000 level served as major support for weeks, with traders watching it like hawks. Now that it's broken, conventional wisdom would scream danger - yet the underlying risk metrics tell a different story entirely.
Risk Signals Defy Price Action
Market safety indicators remain firmly in the green zone despite the price drop. These sophisticated metrics analyze everything from leverage ratios to exchange flows, and they're flashing all-clear signals that contradict the surface-level price movement.
Institutional positioning shows minimal distress, while derivatives markets maintain healthy funding rates. Even the dreaded liquidations stayed within normal parameters - nothing like the cascade failures that typically accompany genuine market crises.
Of course, traditional finance pundits will likely seize on this drop as proof crypto remains unstable - conveniently ignoring how their own markets swing 2% on a Fed whisper while calling a 5% Bitcoin move 'volatile.'
The takeaway? Price breaks matter, but risk metrics matter more. And right now, those metrics suggest this dip might just be another buying opportunity in disguise.
Risk Off Signal Indicates No Danger As Bitcoin May Be Ready For Final Round
In an X post on September 26, Swissblock provides a vital on-chain analysis that suggests the Bitcoin bullish structure remains intact despite recent market losses. This insight is based on the risk-off signal, which indicates that Bitcoin has yet to enter a high-risk regime —a move that would instantly confirm a change in market trend.
As the market remains in a low-risk regime, Swissblock investors expect the bullish structure to start recovering and form a price bottom once market momentum begins to surge again. This recovery likely begins when bitcoin reaches its immediate support level at $108,000.
In this case, Swissblock predicts a new leg higher to be largely driven by institutional demand. While September’s price performance has fared better than expected, ETF inflows reduced in the second half of the month, indicating the need for renewed market institutional interest.
The need for heightened institutional demand is further intensified, considering that long-term Bitcoin holders continue to significantly reduce their holdings. Swissblock has described this activity as a “classic late-cycle behavior”, which points to the end of a market cycle. However, the lack of a high-risk signal negates this indicator at the moment and presents the opportunity for institutions to step in to mop up the growing supply.
Bitcoin Q4 Pump Loading?
In other news, crypto analyst Lark Davis has stated that Bitcoin’s net negative performance in September is a classic market pattern that usually results in a bullish price surge in Q4. Notably, the premier cryptocurrency declined by 8% in September 2023, followed by a 77% price rise in Q4. Likewise, prices dropped by 18% in September 2024, before surging by 101% in the following three months.
Over the past eight days, Davis notes that Bitcoin is down by 8% setting up what appears to be a typical “rektember” playbook. Therefore, investors may begin to position themselves for another significant price leap. At press time, Bitcoin trades at $109,401 with a minor 0.11% gain in the past day. Meanwhile, the daily trading volume is down by 19.16% and valued at $60.52 billion.
