Massive capital withdrawal and panic rising, is the most pessimistic scenario for Bitcoin to drop below $70,000?

Bitcoin has fallen below the $100,000 mark, causing market turbulence. This globally most momentum-driven trading asset is facing a severe test. Analysts warn that if U.S. stocks continue to decline, Bitcoin may retest the $70,000 support level, or even briefly fall below that level.

Last Friday, Bitcoin briefly dropped below $95,000, erasing a 30% gain for the year. Compared to the historical high of $126,000 set on October 6, Bitcoin has evaporated about 25% in just one month. Ethereum is also struggling, with its decline from the August peak expanding to over 35%.

On Monday, Bitcoin rebounded, but the market is generally asking: Is this another "washout" correction, or the beginning of a new deep bear market?

Liquidity Crisis Triggers Chain Reaction

Institutional figures break down this sharp decline into a "two-phase downward" movement:

The first phase comes from a macro risk shock. Last month, trade tensions unexpectedly escalated, triggering a synchronized sell-off of global risk assets. Hex Trust CEO Alessio Quaglini stated, "The turning point for Bitcoin was on October 10, followed by a comprehensive liquidation waterfall in the following days, wiping out leveraged positions."

The second phase is liquidity exhaustion. After the "10.10 crash," liquidity in the Bitcoin market sharply thinned, with even small-scale trades causing severe volatility. Presto Research's research director Peter Chung pointed out, "Liquidity has become extremely thin, coupled with fear at the end of the cycle, further dragging the market down."

Entering November, the deteriorating macro environment has intensified market pressure.

Expectations for a Fed rate cut in December have weakened, and the U.S. government shutdown has led to a pause in economic data releases, further dampening market sentiment. HashKey senior researcher Tim Sun noted that the tightening of liquidity has particularly severe impacts on ETFs, with Bitcoin ETFs that previously attracted over $100 billion now facing capital outflows.

Dual Pressure from Technical and Fundamental Aspects, Most Pessimistic Scenario is Falling Below $70,000?

The market is concerned that if the stock market experiences further profit-taking, crypto assets may face a second wave of concentrated selling.

BTSE Chief Operating Officer Jeff Mei warned that Bitcoin still exhibits typical risk asset characteristics. As AI valuations come under scrutiny and the prospects for rate cuts remain uncertain, Bitcoin's "price further decline may be inevitable."

Hex Trust's Quaglini candidly stated, "We must face the truth: this round of adjustment may not yet be over. If the stock market continues to decline, we could easily retest the $70,000 low, or even possibly fall below it briefly."

According to a previous article from Wall Street Insights, Matthew Hougan, Chief Investment Officer of Bitwise Asset Management, believes, "People are worried that the four-year cycle may repeat itself, and they do not want to experience another 50% pullback. Therefore, they are preemptively avoiding risks by withdrawing from the market." This concern about historical repetition may itself constitute selling pressure.

However, Quaglini also emphasized that this round of selling is fundamentally different from past crises.

"This is not the situation of 2022—there is no credit contagion, no chain bankruptcies, no systemic failures. Once conditions stabilize, we still expect Bitcoin to reach new highs within 12 to 18 months."

Despite facing short-term pressure, some long-term investors remain optimistic about Bitcoin's fundamentals. Hunter Horsley, CEO of asset management firm Bitwise, believes the current price level is attractive for strategic investors.

"From the current price point, this is a reasonable entry point, and the setup is indeed quite favorable," Horsley stated. He revealed that Bitwise has seen more client investments in cryptocurrencies over the past quarter than at any time in the company's seven-year history.

Chung advises retail investors to avoid trying to time short-term fluctuations and to adopt a dollar-cost averaging strategy, focusing on understanding the fundamentals of Bitcoin and Ethereum networks rather than chasing headlines. Sun reminds long-term buyers to wait for macro signals rather than technical signals, as Bitcoin's upside potential depends on the continued easing of global liquidity