Bitcoin falls below $100,000, market sentiment cools, and large investors buy the dip or provide support.

At the beginning of 2025, the Crypto Assets market fell into turmoil.

The $100,000 mark for Bitcoin has become the dividing line between bulls and bears. Climbing above $100,000 on Monday was seen as the beginning of a new round of increases, but just two days later, Bitcoin began to retreat. During the U.S. trading session on Tuesday, Bitcoin hit a low of $92,600, down nearly 10% from Monday's high of over $102,000, and is currently quoted at $94,212.

The drop in Bitcoin has led to a widespread decline in altcoins. Ethereum has fallen back to $3300, Solana has dropped below $200, and the altcoin sector has generally fallen by 10%. Tokens favored by institutions, such as Cardano, Render, and Aptos, have seen even larger declines. The US stock market has also been affected, with major mining stocks including TeraWulf, Bit Digital, Bitdeer, IREN, and Hut 8 down by 5-8%.

Although the decline is still within a controllable range, market sentiment has clearly cooled as Bitcoin approaches the beginning of the year's level. Analysts predict that Bitcoin may drop to $70,000 before the new president's inauguration. Analyst Ali Martinez pointed out that Bitcoin's key support range is between $97,041 and $93,806, and if it fails to hold, it could significantly drop to $70,085.

The main reasons for this round of decline include:

1. Macro data exceeds expectations. The number of job openings in the U.S. JOLTS for November surpassed 8 million, reaching a six-month high. The ISM Services PMI for December recorded 54.1, higher than expected. Strong economic data may prompt the Federal Reserve to maintain a hawkish stance and reassess the interest rate cut path.

2. The minutes from the Federal Reserve's December meeting indicate that the pace of interest rate cuts will significantly slow down in 2025, with an expected total cut of only 75 basis points for the year.

3. Political uncertainty is increasing. Reports indicate that the new president is considering declaring a "national economic emergency" to pave the way for large-scale tariffs. Previously, a series of tough statements made by him at a press conference had already raised market concerns.

4. Risk aversion is on the rise. The three major U.S. stock indexes are weakening, the U.S. dollar index is strengthening, and non-U.S. currencies are generally declining. On January 8, there was a net outflow of funds from both Bitcoin and Ethereum ETFs in the United States.

5. The Department of Justice may liquidate approximately 69,000 coins of Bitcoin. This batch of Bitcoin related to the "Silk Road" case is valued at about $6.5 billion, and the market is concerned it may bring selling pressure.

Despite the low market sentiment in the short term, there are still favorable factors supporting it:

1. Coinbase's lawsuit with the SEC has seen a turnaround, as the court approved the non-appeal motion. If the appeal is successful, it could pave the way for altcoin ETFs.

2. The CFTC chairman is about to step down, and the new presidential team is looking for a successor who is friendly to Crypto Assets.

3. Large investors are performing actively. Data shows that investors holding more than 10 coins of Bitcoin have recently shown a significant increase in their holdings. Institutional investors have also begun buying at price levels below 100,000 USD.

4. Regarding the impact of the "Silk Road" Bitcoin sale, industry insiders believe it may be overstated. The CEO of CryptoQuant stated that with the current market liquidity, $6.5 billion worth of Bitcoin could be absorbed within a week.

Overall, although there is a certain level of panic in the market, the possibility of a significant collapse in the crypto market is low under the support of institutions and large holders buying the dip. The current support level for Bitcoin is around $95,000, and in extreme cases, it may fluctuate below $90,000, but the probability of falling to $70,000-$80,000 is small.

The next focus of the market is the U.S. non-farm payroll report for December, which will be released this Friday. It is expected to show an increase of 153,000 jobs, with the unemployment rate remaining at 4.2%. This data will influence the direction of Federal Reserve policy, and worse-than-expected employment data may prompt the Fed to reconsider its easing policy.