Urgent Bitcoin Price Warning: BTC Drops Below $109K – What’s Next for the Crypto Market?

The cryptocurrency world watches with bated breath as the Bitcoin price takes a significant downturn. Recently, Bitcoin (BTC) slipped below the crucial $109,300 mark, triggering widespread concern among investors. This movement follows a substantial liquidation cascade, leaving many to wonder: how much further can BTC fall before a meaningful rebound?

Understanding the Recent Bitcoin Price Drop

Bitcoin’s latest market action has certainly tested investor resilience. The asset recently dipped below its previous all-time highs from January 2025, a psychologically important level. This drop highlights ongoing volatility within the crypto market, prompting analysts to reassess key support and resistance zones. Many bulls are now feeling the heat, grappling with a 13% pullback from recent all-time highs. Therefore, understanding the current technical landscape becomes paramount for all participants.

The immediate concern revolves around several key trendlines. Both simple (SMA) and exponential (EMA) moving averages are at risk of flipping from support to resistance. Such a shift could signal a prolonged period of bearish pressure. For instance, the 100-day EMA on the daily chart sits at $110,820. Popular trader Cryptorphic recently warned on X, “BTC has broken below the 100 EMA on the daily chart. That’s not a good sign and could open the door for a deeper correction toward $103K.” He further noted, “Historically, every drop below this EMA has led to a short-term pullback. I’m watching closely and hoping Bitcoin reclaims the level soon to keep the uptrend intact.” This indicates a critical juncture for the BTC price.

BTC/USDT one-day chart. Source: Cryptorphic/X

Key Technical Levels and BTC Support Targets

Beyond the 100-day EMA, other significant technical indicators demand attention. The 200-day SMA, a classic bull market support line, rests lower at just under $101,000. The last time BTC/USD traded below this trend line was in mid-April. This level represents a strong historical indicator of market health. A breach here could suggest a more significant market correction.

BTC/USD one-hour chart with 100-EMA, 200-day SMA. Source: Crypto News Insights/TradingView

Moreover, some market participants anticipate even lower BTC price targets. These projections include a retest of the $100,000 psychological mark, or even a drop back into five-figure territory. This bearish outlook stems from a combination of weakening on-chain metrics, such as declining trade volume, and noticeable relative strength index (RSI) divergences. These divergences often signal a potential reversal in momentum. Therefore, vigilance is key for traders.

BTC/USD four-hour chart with RSI divergence. Source: Crypto News Insights/TradingView

On-Chain Insights: Speculators as a Safety Net

Despite the bearish technical signals, some experts believe Bitcoin’s speculative investor base might provide a safety net. Axel Adler Jr., a contributor to on-chain analytics platform CryptoQuant, points to crucial support zones. He noted, “The nearest strong support zone is the 100K–107K range, where the STH Realized Price and SMA 200D intersect.” Here, STH refers to Short-Term Holders, defined as entities holding Bitcoin for six months or less. In bull markets, this aggregate cost basis often acts as robust support during pullbacks. This suggests a strong line of defense for the Bitcoin price.

BTC/USD chart with 200-day SMA, STH cost basis. Source: Axel Adler Jr./X

Adler further elaborated on deeper support levels. He added, “Below that is additional support around 92–93K, a deeper support level reflecting the cost basis of short-term investors who held coins for 3 to 6 months. This will become a key second line of defense if the market loses the 100K–107K level.” These insights offer a glimmer of hope, outlining specific levels where significant buying interest could emerge. Consequently, these zones represent crucial areas for monitoring any potential bounce. Such strong BTC support levels are vital for market stability.

The Impact of a Liquidation Cascade and Potential Rebound

The recent market downturn has been exacerbated by a massive liquidation cascade. Data from CoinGlass reveals total BTC long liquidations nearing $500 million since Sunday. This means many leveraged long positions were forcibly closed, putting further downward pressure on the price. However, this phenomenon also cleanses the market of over-leveraged positions, potentially setting the stage for a healthier rebound.

BTC total liquidations (screenshot). Source: CoinGlass

Interestingly, exchange order books show that most liquidity to the downside has already been ‘hunted.’ This situation sparks faint hopes of a market rebound. Popular trader BitBull predicted on X, “$BTC downside liquidity has been hunted. And now, it seems like shorts will be liquidated next.” He confidently stated, “I think $BTC will hit $114K-$115K this week, leading to a nice rally in alts.” This perspective suggests that once downside pressure subsides, a short squeeze could propel the Bitcoin price upwards. The Kingfisher, an analytics account, also noted $114,000 as a significant level. They observed a “huge wall” of short liquidations awaiting should price return there. “Price often gets pulled to these levels. Smart money is likely using this as fuel,” they told X followers, implying a swift liquidity squeeze could occur.

BTC liquidation heatmap. Source: CoinGlass

Navigating the Volatile Crypto Market Ahead

The current environment in the crypto market presents a complex picture. On one hand, bearish technical indicators and a significant price drop below key levels suggest further downside risk. On the other hand, robust on-chain support from short-term holders and the potential for a short squeeze offer a glimmer of hope for a quick recovery. Traders and investors must therefore remain highly agile, closely monitoring both technical and on-chain data points. The interplay between these factors will ultimately determine the next significant move for BTC. Always conduct your own thorough research before making any investment decisions, as the market remains highly unpredictable.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.