Crypto market recap: Bitcoin extends its downtrend as market fear deepens

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BTC sinks amid extreme fear

Persistent bearish sentiment and mounting liquidations

Bitcoin’s underperformance has become increasingly evident in 2024. While the cryptocurrency has gained less than 3% year-to-date, gold has soared by 55%, and U.S. equity benchmarks such as the S&P 500 and Nasdaq 100 have climbed 14% and 18%, respectively. This widening performance gap has driven many investors to abandon BTC for more stable, better-performing alternatives.

BTC price performance. Source: TradingView

Large holders have also accelerated selling. Over the past few months, long-term investors have offloaded more than $45 billion worth of BTC, further pressuring prices. Bitcoin ETFs are experiencing a similar downturn: over the last three consecutive weeks, they have recorded net outflows totaling more than $3 billion. Meanwhile, futures open interest has fallen from a yearly high of $94 billion to around $66 billion, signaling weak speculative demand.

The Bitcoin Fear and Greed Index has crashed to “extreme fear” at 10—its lowest level since the Terra collapse in 2022—triggering worries of further declines. Analysts warn that a 15% upside move could liquidate over $10 billion in short positions, while an equivalent drop would eliminate only $2.5 billion in long positions, underscoring the market’s increasingly asymmetric risk profile.

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Analysts split on what comes next: Bottoming signals vs. more pain ahead

Market experts remain sharply divided. Analyst Timothy Peterson warns of a 50%–75% probability of deeper downside, historically noting that November—a month marked by institutional portfolio adjustments—has often brought significant stress to BTC markets. He and other commentators suggest a possible bottom forming between $88,000 and $90,000, though a failure to hold this zone could open the path toward a retest of $76,000.

On the opposite side, JPMorgan analysts argue that Bitcoin is already near its fundamental floor. Led by Nikolaos Panigirtzoglou, the team identifies $94,000 as the production-cost-based bottom, citing rising mining difficulty and compressed miner margins. With gold’s volatility climbing and Bitcoin’s relative risk profile narrowing, JPMorgan forecasts a potential surge toward $170,000 in the next 6–12 months.

Despite conflicting predictions, capital inflows from major institutions—including Harvard University’s sizable increase in Bitcoin ETF exposure—suggest that some investors still view BTC’s current weakness as a long-term opportunity.

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