Introduction

The crypto market is under pressure again as Bitcoin and Ethereum both fell below crucial technical support levels on Thursday. The total crypto market capitalization dropped under $3.8 trillion, wiping out billions in value in a matter of hours. The sharp decline follows a mix of macroeconomic uncertainty and renewed liquidation pressure across leveraged positions.

Bitcoin Tests New Lows

Bitcoin, which had recently traded near $110,000, slid to around $104,000 during the early trading hours. Analysts warned that the loss of the $105,000–$107,000 range could open the door for a deeper correction if buying momentum does not return soon.

While long-term sentiment remains bullish, traders are becoming increasingly cautious. Funding rates across derivatives platforms have turned negative for the first time in weeks, indicating a shift in short-term market confidence.

Ethereum Follows the Downtrend

Ethereum mirrored Bitcoin’s weakness, dipping below $3,700 and briefly touching $3,550 before recovering slightly. The break below the $3,800 mark, a key support zone since mid-September, has triggered sell signals on multiple trading indicators.

Despite the decline, on-chain data shows that Ethereum holders continue to stake heavily, suggesting long-term conviction remains intact even as traders take profits.

Broader Market Weakness

Altcoins were hit even harder, with tokens in sectors like DeFi and AI seeing double-digit losses. Solana, Avalanche, and Polygon all dropped between 8% and 12%, erasing much of their early October gains.

Analysts attribute the sell-off to growing risk aversion across global markets, triggered by uncertainty around U.S. monetary policy and ongoing geopolitical tensions. Liquidity across major exchanges also remains thinner than in previous cycles, amplifying volatility during sharp moves.

Analysts Weigh In

Technical analysts are closely watching whether Bitcoin can reclaim the $106,000 mark. A sustained bounce could restore market stability, while a further slide below $103,000 may invite a cascade of stop-loss triggers.

Despite the short-term turbulence, several traders see the current drop as a healthy reset before the next leg higher. “These kinds of pullbacks are necessary to shake out leverage and rebuild a stronger base,” one analyst wrote on X.

Conclusion

The crypto market’s latest downturn has reminded investors that volatility remains a defining feature of digital assets. Bitcoin and Ethereum continue to dominate overall sentiment, and their next moves will likely determine whether this is a short-term correction or the start of a deeper retracement.