Bitcoin has collapsed to a six-month low

The price of the first cryptocurrency fell to a six-month low at $93 000, after which it recovered to ~$95 000.
According to CoinGlass, the liquidation volume in the crypto market reached $619 million over the past day. Of this, $243 million was related to Bitcoin.
The Fear and Greed Index indicates "extreme fear".
The head of research at Caladan, Derek Lim, explained that liquidity is temporarily constrained: the U.S. government shutdown has led to an increase in the overall treasury balance.

He expects rapid changes: the resumption of government spending will return liquidity to the system, and Japan's stimulus package of 17 trillion yen ($110 billion) can support global financial markets.

The head of the markets department at MHC Digital Group, Edward Carroll, agrees with him. He noted that the financing indicators resemble the situation at the end of 2018 and in 2019.

"The crypto market, being more reactive, adjusted earlier than TradFi," said Carroll.

The specialist considers the medium-term forecast to be positive. He pointed to the role of Bit as "digital gold," the expectations of liquidity recovery, and interest from institutional investors.

"The current pullback reflects tight financing conditions, rather than a violation of the fundamental indicators of cryptocurrencies. When the liquidity cycle turns, we expect that digital assets will be the first to recover," concluded the expert.

Key levels

BTC Markets analyst Rachel Lucas stated that Bitcoin is testing support around $94 000. She identified the critical level as the range of $88 000–91,000.

Lim noted that experts are monitoring the 50-week simple moving average at the level of $103 000. A weekly close below this level is considered a bearish signal.

The altcoin market has also decreased. Over the week, Ethereum fell by 11.6% to $3185, XRP by 8% ( to $2.25), and Solana by 16.1% ( to $141).

"Historically, altcoins need excess liquidity and euphoria for growth. There is neither at the moment," Lim said.

He added that the season of alternative coins is unlikely to begin without improvement in these factors.

Remember, analysts from QCP Capital outlined the conditions for supporting Bit until the end of the year.