Bitcoin News Today: Extreme Fear, Mixed Signals: Bitcoin's $94K Test Decides Fate

Bitcoin traders are sounding alarms as the cryptocurrency's two-year uptrend faces its most significant test yet, with key technical indicators and sentiment metrics flashing warnings of a potential capitulation phase. The price of Bitcoin (BTC) has fallen below critical support levels, including the 50-week simple moving average (SMA), sparking debates among analysts about whether this signals the start of a broader correction or a short-term bottoming process according to Cointelegraph.

The breakdown has been exacerbated by acute stress among short-term holders, who are experiencing losses of 12.79%, and the inversion of previously supportive price bands into resistance. Bitcoin's slide to $94,500-a level that would erase its 2025 gains-has intensified concerns that institutional demand is waning. U.S. spot Bitcoin ETFs, for instance, recorded a $870 million outflow in a single day, the second-largest since their launch, as macroeconomic uncertainties and regulatory caution drive risk-off behavior.

Market sentiment has turned sharply bearish, with the Fear and Greed Index plummeting to 15, a level last seen in February 2025 before a 25% price drop. Santiment's analysis highlights a "capitulation" phase, where negative sentiment across Bitcoin, Ethereum, and XRP suggests retail traders are exiting positions, creating opportunities for larger players to accumulate at discounted prices. Meanwhile, on-chain metrics reinforce the bearish narrative: Bitcoin's Net Unrealized Profit (NUP) ratio has hit 0.476, a historically significant threshold for short-term bottoms.

However, not all signals are uniformly dire. CryptoQuant's Bull Score Index has declined from 80 to 20 since October, but the firm notes that a potential floor exists near $94,000, tied to the cost basis of 6–12-month holders. A bounce from this level could stabilize the market, though a close below it risks accelerating losses according to Cointelegraph. Similarly, the 365-day moving average ($102,000) remains a critical psychological barrier; its repeated breaches in recent weeks - unprecedented in this bull cycle - could validate deeper corrections.

Institutional caution has also fueled volatility, with Bitcoin's volatility index (BVIV) surging past a key trendline, signaling heightened price turbulence. Analysts attribute this to thinning liquidity, reduced participation from traditional volatility sellers (e.g., whales and miners), and macroeconomic headwinds like rising real yields. Despite these challenges, some market participants remain cautiously optimistic. American Bitcoin, a major crypto miner, reported a third-quarter profit, and co-founder Eric Trump has called the current selloff a "buying opportunity," emphasizing that "volatility is your friend" in crypto markets according to MarketWatch.

The path forward remains uncertain. While on-chain data shows accumulation by long-term holders and a potential regulatory reset post-U.S. government shutdown, the immediate focus is on Bitcoin reclaiming $100,000 to stave off further declines. As Kyle Reidhead of Milk Road notes, patience is key: "A local bottom is forming as weak hands are shaken out," but a rebound to $110,000 will require renewed institutional inflows and macroeconomic clarity.

For now, the market is in a delicate balancing act. With Bitcoin ETF outflows persisting and the Fear and Greed Index at "extreme fear" levels, the next few weeks will test whether this is a cyclical pause or the beginning of a deeper bear market. As Santiment underscores, history suggests that extreme fear often precedes rebounds-but timing the bottom remains a perilous game.