Bitcoin (BTC) has taken a sharp turn south, slipping below the critical $100,000 mark for the first time since breaking that milestone last year raising questions about whether it’s a good time to buy?

This dramatic drop—falling from a high of $106,294 to a low of $99,462—has shaken both seasoned investors and newcomers alike.

The sudden plunge wiped out approximately $135 million in BTC longs across crypto derivatives markets, with total liquidations exceeding $902 million across the entire crypto economy. The chaos has many wondering: what’s behind this steep correction, and where does Bitcoin go from here?

The Trump Inauguration “Sell the News” Effect

One major theory circulating among market analysts is the so-called “sell the news” phenomenon tied to President Trump’s inauguration. In the days leading up to the event, Bitcoin experienced a rally fueled by speculative optimism, often dubbed the “Trump effect.”

Now that the event has passed, traders appear to be cashing out, a common pattern in the crypto space where hype-driven rallies often face sharp corrections once the event is over. Some traders jokingly remarked, “At least the inauguration can’t be a sell-the-news event now,” as the sell-off coincided with the much-anticipated launch of Trump-themed meme coins, TRUMP and MELANIA, which also faced a rocky debut.

Macro Pressure and Market Volatility

Beyond the Trump-related noise, the broader economic environment has played a key role in Bitcoin’s downturn. The cryptocurrency market continues to grapple with:

• Rising global interest rates, which dampen risk-on assets like Bitcoin.
• Tightening liquidity in financial markets, leaving less capital for speculative investments.
• Regulatory uncertainties, particularly in the U.S., where the SEC has intensified scrutiny on major crypto platforms.

These factors have made Bitcoin and other cryptocurrencies more vulnerable to sharp price swings, as traders and institutions adopt a more cautious approach.

Trading Volume Spikes as Fear Sets In

The market’s response to Bitcoin’s slide has been swift and intense. In the last 24 hours, BTC trading volume surged to $78.49 billion, indicating significant activity as traders scrambled to either cut losses or capitalize on the dip.

While some investors are buying the dip, viewing sub-$100K levels as an opportunity to accumulate, others are offloading positions to avoid further downside. This tug-of-war between bulls and bears underscores Bitcoin’s volatility and its susceptibility to sudden sentiment shifts.

What About the Altcoin Market?

Bitcoin’s slump has had ripple effects across the broader crypto market. Key altcoins like Ethereum (ETH), Solana (SOL), and Dogecoin (DOGE) have also seen substantial declines:

• Ethereum (ETH) remains relatively stable, posting a minor gain of 0.17% as it hovers around $3,301.
• Solana (SOL) fell 8.10%, reflecting heightened risk aversion among investors.
• Dogecoin (DOGE) plunged 8.35%, continuing its struggle to sustain momentum in the face of market headwinds.

Meanwhile, meme coins like Pepe (PEPE) saw some of the steepest losses, with a 12.73% drop, reinforcing the risks associated with speculative assets.

Liquidations Highlight Market Fragility

The liquidation of $135 million in BTC longs is a stark reminder of the fragility of leveraged positions in crypto markets. As Bitcoin’s price dropped, these highly leveraged bets were wiped out, amplifying the sell-off and creating a cascading effect across the market.

For traders, this serves as a cautionary tale about the dangers of over-leveraging in a market as unpredictable as cryptocurrency.

Is This the Start of a Deeper Correction?

The big question now is whether this dip below $100K signals a temporary blip or the start of a more prolonged correction. Historical trends suggest that Bitcoin often faces significant resistance and volatility around psychological price levels like $100,000.

Some analysts argue that as long as Bitcoin remains above key support levels (around $95,000), the broader bull trend remains intact. Others warn that failure to hold these levels could lead to a deeper pullback, potentially testing support at $85,000 or lower.

Long-Term Fundamentals Still Intact

Despite the short-term turbulence, Bitcoin’s long-term fundamentals remain strong:

1. Institutional adoption continues to grow, with major players like BlackRock and Fidelity exploring Bitcoin ETFs.
2. Layer-2 solutions, such as the Lightning Network, are driving scalability and adoption for payments.
3. Global macro trends, like de-dollarization and inflation concerns, make Bitcoin an attractive hedge for many investors.

For long-term holders, moments like these are often seen as opportunities rather than setbacks.

What’s Next for the Crypto Market?

As Bitcoin navigates this critical juncture, all eyes will be on key macroeconomic data and regulatory developments. The Federal Reserve’s next interest rate decision, for example, could significantly influence market sentiment.

In the meantime, traders should brace for continued volatility. For those willing to stomach the turbulence, the current dip may represent a chance to accumulate at a discount. But as always in crypto, timing the market is easier said than done.

Bitcoin’s drop below $100,000 has sent shockwaves through the crypto market, but it’s far from the end of the road. While short-term challenges remain, Bitcoin’s long-term potential as a store of value and hedge against traditional financial instability continues to attract investors.

Whether this correction proves to be a fleeting dip or the start of a larger downturn, one thing is certain: Bitcoin is never boring.