Bitcoin Plummets Below $100,000 Amid Market Sell-off

Bitcoin experienced a significant price drop this week, falling below the $100,000 level for the first time since June and hitting a five-month low of $96,794. This downturn is occurring amidst a wider decline in the cryptocurrency market, with Ether also seeing substantial losses. \n\nSeveral factors are contributing to this slump. Investors are increasingly moving away from riskier assets as the US Federal Reserve signals a cautious approach to interest rate cuts. Furthermore, a wave of liquidations in October wiped out billions of dollars in bullish cryptocurrency positions. The market is also reacting to geopolitical tensions, including trade war concerns sparked by potential US tariffs. Data indicates the global crypto market has lost around $840 billion in aggregate market value over the last month, with Bitcoin experiencing its worst monthly performance since 2018. \n\nThis current decline contrasts with a period in 2025 when Bitcoin and cryptocurrencies saw significant gains, buoyed by favorable legislation easing regulatory burdens, major company investments, and the US Treasury building a substantial Bitcoin reserve. Cryptocurrencies were also viewed as a safe haven asset. However, concerns over modified US tariffs and fears of a trade war, alongside anticipation of further interest rate cuts by the US Federal Reserve, have dampened sentiment.\n\nImpact\nThis news signals increased volatility and risk aversion in the digital asset space. For Indian investors, it highlights the interconnectedness of global financial markets and can influence sentiment towards other high-risk investments, potentially leading to broader market corrections if a contagion effect occurs. Its direct impact on the Indian stock market might be limited, but it affects investor psychology and risk appetite globally. Rating: 6/10\n\nDifficult Terms:\nBitcoin: A decentralized digital currency that operates independently of a central bank, using cryptography for security.\nCryptocurrency: A digital or virtual currency secured by cryptography, making it nearly impossible to counterfeit or double-spend.\nAlt-coins: Cryptocurrencies other than Bitcoin, often developed with different features or purposes.\nLiquidations: The process of converting an asset into cash. In crypto trading, it refers to the forced closure of a trader's position when they cannot meet margin requirements.\nExchange-Traded Funds (ETFs): Investment funds traded on stock exchanges, offering diversification and ease of trading. In crypto, these track the price of digital assets.\nBear Market: A prolonged period in which asset prices fall significantly, typically by 20% or more from recent highs.\nBullish Positions: Investments or trades made with the expectation that the price of an asset will rise.\nAggregate Market Value: The total value of all outstanding units of a particular asset or market, calculated by multiplying the price per unit by the total number of units.\nTariff War: A situation where countries impose taxes (tariffs) on each other's imports and exports, often leading to economic friction.\nFederal Reserve: The central banking system of the United States, responsible for monetary policy and financial stability.\nInterest Rate Cuts: A reduction in the benchmark interest rate by a central bank, intended to stimulate economic activity by making borrowing cheaper.\nSafe Haven Asset: An investment that is expected to retain or increase its value during periods of market turbulence or economic uncertainty.