Bitcoin Is Back Below $110,000. Here's What to Know About the Latest Crypto Sell-Off.

Market Overview - The price of bitcoin has fallen below $110,000, down more than 5% for the week and over 10% from its August all-time high of over $124,000, leading to a total crypto market value dropping under $4 trillion [1] - Altcoins such as ether and solana have also experienced declines, contributing to the overall market downturn [1] Impact on Crypto Stocks - Crypto-related stocks have been negatively affected, with Bitcoin treasury stock Strategy and stablecoin issuer Circle falling about 10% in the past week, while crypto exchange Coinbase Global dropped around 7% [2] Market Dynamics - The recent sell-off began on September 21, when over $1.5 billion in leveraged-long positions in bitcoin were liquidated, impacting other cryptocurrencies as well [3] - Market observers are predicting further declines, with a 60% probability that bitcoin's price may dip below $100,000 before the end of the year [3][8] Investor Sentiment - The current market volatility is causing concerns among investors, with some experts advising patience rather than immediate reactions to the sell-off [4] - An indicator of bearish sentiment is the options skew, which shows that bullish call options on bitcoin are significantly more expensive than bearish puts, indicating defensive positioning [5] ETF Influence - The emergence of spot bitcoin ETFs, such as BlackRock's iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund, has distinguished this market cycle, with these funds collectively amassing over $150 billion in assets under management since their launch in January 2024, representing more than 6% of the current bitcoin supply [6] Seasonal Trends - Historical data suggests that median bitcoin returns tend to be stronger at the beginning of the month and weaker in the latter half, attributed to fund inflows, window dressing, and profit-taking [7]