No one dares to buy the dip! Bitcoin has fallen nearly 50% from its all-time high. Analysts reveal the "key" to a turnaround in the future market.

Bitcoin briefly plunged today (6th) morning, approaching the $60,000 level, hitting a new low since September 2024, and retreating nearly 50% from its all-time high. Analysts point out that multiple failures to hold key support levels have led to a complete collapse of market confidence, causing a fundamental shift in trading behavior, with investors “selling on rebounds” and no one wanting to be the “bagholder.”

Binance market data shows that Bitcoin hit a low of exactly $60,000 this morning, with a single-day decline of up to 17%. Although it later rebounded to around $65,000, the volatility was so intense that many investors remain shaken. Ethereum was similarly bloodied, briefly touching a low of $1,750, and is currently fluctuating around $1,888.

This wave of selling has caused heavy losses for leveraged traders. According to Coinglass data, in the past 24 hours, the total forced liquidation amount in the crypto derivatives market reached $2.6 billion, with $2.1 billion of that coming from long positions being liquidated.

Currently, the “Crypto Fear & Greed Index” has plummeted to 9, entering an “extreme fear” state, the lowest since June 2022, indicating that market sentiment has hit rock bottom.

Vincent Liu, Chief Investment Officer at Kronos Research, pointed out that this sharp decline in Bitcoin can be described as the result of a “perfect storm”:

Over-leveraged longs being forcibly liquidated, ETF and institutional capital retreating, combined with a shift in the macroeconomic environment toward safe-haven assets—these three forces fermented simultaneously, creating a classic deleveraging sell-off driven entirely by panic.

Liu further noted that Bitcoin’s “capitulation sell-off indicator” recently experienced its second-largest jump in nearly two years, signaling intensified forced selling pressure.

BTC Markets cryptocurrency analyst Rachael Lucas described the market sentiment as having fully shifted to a defensive mode:

Market sentiment is clearly leaning toward risk aversion. Traders are no longer trying to catch falling knives but are prioritizing preserving capital. You can see that each rebound in Bitcoin is quickly met with selling pressure, and trading volume actually decreases after the liquidation wave subsides.

Lucas explained that repeated breaches of Bitcoin’s support levels have caused investors, who are accustomed to “buying on dips,” to now “sell on rebounds,” with some even outright exiting the market and waiting for stability. This behavioral shift further exacerbates downward pressure.

It is also noteworthy that institutional investors, long considered “long-term believers,” are beginning to waver. During Tuesday and Wednesday, Bitcoin spot ETF saw net outflows exceeding $800 million. Lucas added:

While confidence in long-term holding hasn’t disappeared, short-term positions are clearly undergoing a shakeout. Historically, such phases tend to wipe out the weak hands and leave long-term holders intact. Faith remains, but it is under severe test.

Looking ahead, will a market rally emerge from despair, or is a wave of selling still imminent? Vincent Liu believes that the key lies in whether Bitcoin can hold the support zone between $58,000 and $60,000.