Bitcoin: Is a drop below $90K bound to happen in November?

Key Takeaways

Why is Bitcoin’s current pullback hitting harder?

STHs bought aggressively near the top, pushing Bitcoin supply in profit down to 68%. Combined with thin bids, even a 23% correction is straining the market.

Could BTC fall below $90k soon?

With extreme fear, rising leverage, and more STHs underwater, the pressure isn’t being absorbed, making a break below $90k highly likely.

HODLing support has long been a key driver of investor FOMO. 

However, Bitcoin [BTC] is starting to lose footing. Last week, it dumped 10.6%, slicing through not one, but three major support zones. Most notably, it retested the $92k floor for the first time since early Q2.

The fallout? Nearly $2 billion in liquidations hit the market during the same period. Hence, the question is: Is this just another “deleveraging” flush, or are we seeing the setup for a potential push below $90k?

Sentiment divergence signal more than routine weakness

Bitcoin is slipping further into bearish territory.

Sentiment wise, “extreme” fear continues to grip investors, a hallmark of short-term capitulation phases. Flows are reinforcing the setup. November is shaping up to post record-breaking ETF outflows.

So far, $2.3 billion has already exited mid-month, marking the second-largest outflow on record. If selling pressure persists, November could easily claim the top spot, adding fuel to the bearish narrative.

Source: CoinGlass

Against this setup, liquidations are piling on, further weighing on Bitcoin.

CoinGlass data shows that over the past 16 days, there have been three days with liquidations exceeding $1 billion, and high-cap assets alone have seen daily liquidations surpass $500 million, intensifying Bitcoin’s dips.

And yet, BTC’s leverage ratio is spiking, making this weakness look like a “routine” flush of weak hands. However, sentiment shows a key divergence this cycle, indicating that BTC’s pullback isn’t just typical deleveraging.

Bitcoin correction under 30% but market strain is record high

By slipping below $92k, BTC has now seen a 23% correction from its ATH.

While past corrections reached 26% and 28%, this pullback is already hitting the market harder.

For example, during the April cycle, BTC dropped nearly 32% from $109k to $74k, but supply in profit remained above 75%.

This time, Bitcoin’s supply in profit has fallen to 68%, the lowest since the 2023 bear cycle. Naturally, STHs are feeling the squeeze like never before, increasing the risk of capitulation and adding pressure on key levels.

Source: CryptoQuant

In short, the 68% supply in profit shows that short-term holders were more aggressive buyers near the top this cycle. In past corrections, fewer STHs bought so close to the peak, so supply in profit stayed higher.

This helps explain why Bitcoin’s weekly dips are hitting harder than usual. 

As BTC breaks key support, more STHs are moving underwater. However, with “extreme” fear, thin bids and high liquidation risk, the market can’t absorb the pressure, making a drop below $90k seem inevitable.