Bitcoin has taken a steep nosedive below its $93K support and is now sitting precariously around $81K.

The entire market turned into a sea of red faster than anyone expected as the bottom officially fell out of range.

And yes, the crypto doomers are already writing Bitcoin's obituary for approximately the 467th time.

Panic Mode Activated

Short-term holders are absolutely freaking out right nowm, and for good reason.

The Short-Term Holder SOPR chart just dipped below 1, which is fancy analyst talk for "everyone's panic selling at a loss" – not exactly the bullish sentiment we were feeling just a handful of months ago. 

We're looking at over $1.7 billion in realized losses – the highest since August – meaning a whole lot of recent buyers just rage-quit the market.

This is the crypto equivalent of a fire sale, and it's not pretty.

Over $320 million worth of Bitcoin got liquidated on perpetual futures exchanges – the highest since August 2023.

Long positions took the beating of a lifetime, with $873 million wiped out in a single day.

The total damage across all crypto comes to a significant $1.06 billion in liquidations, affecting 230,000 traders.

This is the sort of thing that happens when you trade with leverage on an asset that moves 10% in a matter of minutes – it can be difficult to hedge against those kinds of swings without a proper stop loss in place.

The Bottom Signal?

Could this actually be the bottom, though?

The Global Bid-Ask Ratio, which tracks data from over 1,400 cryptocurrencies, is showing the same pattern we've seen before major bullish reversals, and buying pressure is suddenly spiking on the histogram – completely contradicting the bearish trend we've been seeing since May.

And while the newcomers are panic selling, Bitcoin veterans holding for 155+ days aren't even flinching on the recent dip.

They've seen this movie before and know how it ends.

Fear Makes You Poor

The Fear and Greed Index just hit its lowest point since October, and we're officially in "extreme fear" territory, which historically has been when smart money starts accumulating.

This is exactly when contrarians start licking their lips and buying with both hands while everyone else is hitting the eject button.

The best buying opportunities rarely feel comfortable and don't come with a friendly warning.

If Bitcoin stabilizes and rebounds here, we could see it target the $113,000 level.

If the momentum shifts, all those shorts piling in right now could fuel the mother of all short squeezes.

But don't get too comfortable – further downside is still very much on the table, and knife-catching is a dangerous game even for the pros.

The reality is that Bitcoin doesn't care about your trading plan or your mortgage payment.

Viva La Bitcoin

We've seen this pattern play out dozens of times since 2009: Bitcoin crashes, everyone panics, the obituaries get written, weak hands sell to strong hands, and then the cycle continues.

Some lessons in this market have to be learned the hard way.

The only question that matters is which side of the trade you want to be on when the dust settles.