What Happened to Bitcoin Crashing Today? Latest Price Drop Explained

Bitcoin crashing trends intensified today as the price fell below $98,000 for the first time in nearly six months. The world’s largest cryptocurrency slid sharply during Thursday trading. The decline pushed Bitcoin toward levels not seen since early May.

The drop followed heavy selling by long-term holders, weaker institutional demand, and market fatigue after the U.S. government reopened from a record 43-day shutdown. Analysts say several macro factors contributed to the sudden shift in momentum.

Bitcoin Crashing: Key Factors Behind the Sharp Drop

Bitcoin’s price fell from an intraday high of about $104,000 to lows near $97,870. This erased earlier gains and confirmed a stronger downside trend. According to Bitcoin Magazine Pro, long-term holders sold more than 815,000 BTC in 30 days. That is the highest level of long-term holder selling since early 2024. Profit-taking accelerated as the market absorbed more than $3 billion in realized gains on November 7.

CryptoQuant data shows institutional buying also fell below daily mining supply. That shift added more selling pressure. Analysts say the price is hovering near the 365-day moving average at around $102,000. A failure to reclaim that level may lead to deeper losses if demand continues to weaken.

Bitfinex analysts noted that the current decline resembles past mid-cycle retracements. They pointed out that the drop from October’s peak mirrors the typical 22% pullback seen during the 2023–2025 bull market. They also highlighted that about 72% of all Bitcoin remains in profit even at $100,000. This means sentiment remains cautious but not panicked.

JPMorgan analysts project the estimated production cost of Bitcoin at roughly $94,000. They said this often acts as a historical price floor. Rising network difficulty has pushed production costs higher. Their 6–12 month outlook still targets potential upside near $170,000.

The U.S. government’s reopening added another layer to the market environment. The shutdown created liquidity stress as the Treasury General Account swelled. Timot Lamarre of Unchained told Bitcoin Magazine that Bitcoin acted like a “canary in the coal mine” for tightening liquidity. With the government funded again through January 30, he believes more liquidity will reenter the system soon.

Agencies such as the IRS face large backlogs. Air travel may see days of continued delays. Many national parks must recover lost revenue. Analysts say these disruptions contribute to a fragile economic backdrop that influences Bitcoin in unpredictable ways.

How the Broader Market Shaped Bitcoin’s Decline

Bitcoin’s correlation with the Nasdaq intensified the volatility. Wintermute reported that Bitcoin now reacts more strongly to market downturns than upswings. This “negative skew” is usually seen in bear markets. Yet Bitcoin is still trading less than 20% below its all-time high.

Two main trends explain this pattern. First, investors shifted more capital into tech stocks in 2025. That redirected attention away from crypto. Second, crypto liquidity is thinner than earlier bull cycles. Stablecoin issuance has stalled. ETF inflows slowed. Order book depth remains weaker across exchanges. These conditions make downward moves sharper than upward ones.

Still, Wintermute believes Bitcoin is showing resilience. Even with these pressures, the price remains elevated compared to historical cycles. The firm says this reflects Bitcoin’s growing role as a macro-sensitive asset.

Bitcoin crashing trends may continue in the short term as investors wait for stronger demand. The price near $98,000 signals a cautious market, but analysts still see long-term support from production costs and macro liquidity. Traders will watch whether Bitcoin can stabilize above key levels in the days ahead.

FYI (keeping you in the loop)-

Q1: Why is bitcoin crashing today?

Bitcoin is falling due to heavy long-term holder selling, weak institutional demand, and macro liquidity strain after the U.S. shutdown. The market shows signs of fatigue.

Q2: Will bitcoin recover after this crash?

Analysts say a short relief rally is possible. A stronger recovery depends on fresh demand, ETF inflows, and market liquidity improving.

Q3: What is Bitcoin’s current support level?

Analysts cite the 365-day moving average near $102,000 and JPMorgan’s production-cost estimate of $94,000 as key levels.

Q4: How did the U.S. shutdown affect Bitcoin?

Liquidity tightened as the Treasury General Account swelled. With government operations restarting, some liquidity may return to markets.

Q5: Is Bitcoin still near all-time highs?

Yes. Even after the crash, Bitcoin remains within 20% of its all-time high. The long-term trend is still elevated.