Bitcoin Breaks the 110K Support — Market Crash or Bull Run Beginning?

!!! Warning: This article does not constitute investment advice. Any trading losses are the sole responsibility of the investor. !!!

The Fall Below 110K

Bitcoin has finally broken through the key half-channel support at $110,000, plunging as low as $107,000. This level had served as a psychological floor for weeks, and its loss has triggered heightened volatility and renewed anxiety across the market.

The Fear & Greed Index now reads 22 — Extreme Fear, a level often associated with historical capitulation events. Traders who were once betting on a “fast recovery” driven by a potential U.S. government shutdown resolution are instead witnessing a steep selloff that has shaken confidence in the market.

This move forces investors to ask: is this the start of a larger breakdown toward $98,000, or a necessary reset before the next major rally?

The Current Landscape — Panic, Liquidity, and Disbelief

1. Loss of a Key Structural Level
   The break of 110K marks the first clean breach of the half-channel that has defined Bitcoin’s mid-term trend. This line acted as both support and sentiment anchor. With it gone, traders are recalibrating targets toward the next major support at 98K — a level corresponding to prior liquidity clusters and Fibonacci retracement zones.
2. Extreme Fear as a Contrarian Signal
   While fear dominates social sentiment, seasoned market participants often see such extremes as opportunities. Historically, when the index drops into the low 20s or below, mid-term rallies frequently follow, as leveraged sellers exhaust themselves and institutional buyers quietly reaccumulate.
3. Shift Toward “Safe Markets”
   The recent volatility has accelerated capital rotation out of crypto and into perceived safer assets — such as short-term bonds and gold. This migration reflects not only macro caution but also a loss of short-term trust in the digital asset space after multiple liquidation events and exchange instability.
4. Macro Drivers Still in Flux
   Hopes for a Federal Reserve rate cut and a smooth resolution of the U.S. government shutdown once fueled bullish optimism. Now, the absence of concrete policy action leaves risk assets vulnerable. Until macro clarity improves, technical signals will dominate short-term direction.
5. Technical Context — A Chance Within Chaos
   Despite the breakdown, Bitcoin’s price action still follows a familiar rhythm: capitulation → consolidation → recovery. If BTC manages to stabilize above 105K–107K, reclaim 110K, and print a strong daily close above that threshold, it could mark a fakeout bottom that traps late shorts and sparks a short-covering rally.

The Two Scenarios — Breakdown vs. Bull Revival

A. Bearish Scenario — The Slide to 98K

• If selling momentum accelerates and daily closes remain below 110K, the path toward 98K becomes increasingly probable.
• Funding rates turning negative across derivatives markets would reinforce this scenario, showing sustained bearish conviction.
• Any failure to defend the 105K–107K area could open a liquidity vacuum leading to a deeper retracement.

B. Bullish Scenario — Reclaim and Recover

• Should Bitcoin rapidly reclaim 110K and absorb the 107K dip as a liquidity sweep, it may signal a macro higher-low formation.
• “Extreme Fear” sentiment could then become a springboard — as it has been in past cycles (e.g., late 2022, mid-2023).
• A decisive push above 115K would confirm that the correction phase has ended and reignite momentum toward previous highs.

Market Psychology — The Test of Conviction

Bitcoin bull runs are rarely born from optimism; they are forged in disbelief and fear.
Historically, major reversals occurred when traders abandoned hope, liquidity thinned, and volatility peaked. Today’s environment fits that description — but timing remains uncertain.

For new entrants, caution is essential. For veterans, moments like this often separate those who panic from those who prepare. Whether the next move is a continuation of fear or the ignition of the next bull leg depends on how Bitcoin behaves around 105K–110K in the coming days.

Closing Thought

Extreme fear has never been comfortable — but it has often preceded strength.
If Bitcoin can weather this breakdown, reclaim lost ground, and stabilize sentiment, this phase may later be remembered not as the collapse, but as the foundation of the next rally.

So, which side are you on — fear or conviction?