Bitcoin Faces Bearish Risk Below $108,000 Amid Market Volatility

Bitcoin's price has been under significant scrutiny, with analysts warning that the cryptocurrency must hold above $108,000 to avoid a bearish spiral. This critical level has been identified as a pivotal support point, below which the market sentiment could shift dramatically, leading to a potential downward trend. The concern arises from the recent volatility in the crypto market, which has been influenced by a series of macroeconomic events and regulatory developments.

Crypto analyst Daan Crypto Trades emphasized the importance of maintaining momentum as Bitcoin approaches its all-time high. He noted that a drop back to $108,000 could trigger a bearish downtrend, potentially pushing the price below $100,000 and possibly down as far as $96,000. Bitcoin reached $110,498 on Thursday but has since retraced to $109,250, approximately 2.5% below its all-time high of $111,970. Daan’s chart analysis indicates that if Bitcoin falls back toward $108,000, it could trigger a bearish downtrend, potentially pushing the price below $100,000 and possibly down as far as $96,000.

Several other analysts appear confident in a Bitcoin uptrend. Crypto analyst Miles Deutscher said, “It’s very hard to be bearish here.” Crypto trader CryptoFayz explained using a chart that if Bitcoin does break its current all-time high of $111,960, it could continue its uptrend to $116,000. Similarly, 10x Research’s Markus Thielen told that this price level could be reached by the end of July, citing strong inflows into spot Bitcoin ETFs, uncertainty around the US Federal Reserve, and the rapid decline of Bitcoin supply on crypto exchanges.

However, Daan said that Bitcoin’s current consolidation looks slightly different from earlier ones in this cycle. “It is still following the same pattern where it stalls, deviates below, retakes the range and then grinds higher,” he said, adding that it is missing “the actual breakout and continuation.” McKay Research founder James McKay said, “The longer we have these periodic, multimonth consolidations, the more it’s going to take us off the beaten [path] with respect to the typical four-year cyclical behaviour.”

Bitcoin hasn’t dropped below $100,000 since June 22, when it briefly touched $98,900 amid the conflict between Israel and Iran. A move back below this level would wipe approximately $2.67 billion in long positions. If Bitcoin falls to $99,445, approximately $2.7 billion in long positions will be at liquidation risk.

The past week has been particularly eventful, with the US Senate passing the GENIUS Act, a landmark legislation aimed at regulating stablecoins. This move, along with other regulatory shifts, has added to the uncertainty in the market. Additionally, the Federal Reserve's decision to leave interest rates unchanged, coupled with geopolitical tensions in the Middle East, has contributed to the overall volatility. These factors have led to a seesaw effect in the spot markets, with implied volatility experiencing its own series of ups and downs.

The market sentiment for Bitcoin has been particularly sensitive to these developments. The bullish skew that was apparent in volatility smiles across the term structure has abated, with short-tenor options briefly skewing toward out-of-the-money (OTM) puts before returning to neutral. This shift indicates a cautious approach among traders, who are now more inclined to hedge against potential downside risks rather than betting on further upside.

Ethereum, the second-largest cryptocurrency, has also been affected by these market dynamics. Despite maintaining its longest inflow streak of 2025 through ETH Spot ETFs, the short-tenor volatility smiles for ETH have surged as high as 7%. This suggests that while there is optimism in the market, there is also a heightened level of risk aversion. The ETH-to-BTC implied volatility ratio reached a nearly five-year high, driven by ETH’s significantly higher realized volatility amid a sharp spot price rally.

The broader market sentiment has been influenced by a range of factors, including the public feud between President Trump and Tesla CEO Elon Musk, which had a minimal impact on perpetual funding rate markets but resulted in a temporary sea of red in crypto spot markets. The conflict in the Middle East also left its mark on the trading volume of perpetual swap contracts, with funding rates turning negative for a slew of tracked tokens.

The regulatory environment has been another key factor influencing market sentiment. The appointment of pro-crypto regulators and the clarification of rules around staking and ETF approvals have been seen as positive developments. However, the proposed BITCOIN Act, which could position the US government among the largest holders of Bitcoin globally, has added to the uncertainty. The GENIUS Act, which establishes frameworks for the safe issuance of stablecoins, has also been a significant development, potentially leading to increased institutional demand for Bitcoin.