Summer gains evaporate completely! Bitcoin falls below the $100,000 mark, and the cryptocurrency market is once again being washed in blood.

Notice that Bitcoin has erased all of the gains from the summer, giving back the gains it saw during the fervent pursuit by Wall Street and the increase in institutional buying. During the New York trading session on Tuesday, the earliest cryptocurrency fell by 7.4% to $96,794, breaking below the $100,000 mark for the first time since June. This drop of over 20% from the historical high point set a month ago is in line with the bear market retracement in the stock market. Ethereum also fell by as much as 15%, and various so-called altcoins saw similar drops, widening the year-to-date losses of many lesser-known tokens to over 50%. The turning point came in October when a brutal liquidation wave wiped out billions of dollars' worth of long positions. Since then, traders have been cautious. The open interest in Bitcoin futures contracts remains far below pre-crash levels, and even with favorable funding rates, few are willing to re-enter the market. As a result, Bitcoin's year-to-date gains are less than 10%, lagging behind the stock market, and its role as a portfolio hedge tool has once again failed to materialize. "Bitcoin's drop to the June low point reflects the market structure still struggling to digest the psychological shadow left by the massive liquidation event in October which fundamentally changed participants' response to the current downtrend," said Chris Newhouse, research director of decentralized finance company Ergonia. This can be seen as a "low conviction sell-off". According to data compiled by Coinglass, the total liquidation on Tuesday (including longs and shorts) amounted to a moderate $1 billion, significantly lower than the record of approximately $19 billion set on October 10. Meanwhile, options traders have built up large hedging positions against further declines. According to data from Deribit, a crypto exchange under Coinbase, demand for put contracts with a strike price of $80,000 and expiring in late November is the highest. Bitcoin's decline aligns with the pullback in overvalued tech stocks this week. As concerns over high valuations arise, concept stocks like Palantir and Nvidia have seen significant declines. Bitcoin, often viewed as a sentiment indicator for speculation, is once again dropping in sync with the stock market sentiment. Cryptocurrencies also face other unfavorable factors, including outflows from exchange-traded funds and concerns about potential selling by treasury companies holding digital assets. If Bitcoin further retraces, investors will shift their focus to the widely watched $100,000 level, which was briefly surpassed in mid-June. Outflows have been observed in both spot Bitcoin and Ethereum ETFs over the past month, indicating cooling investor demand following strong gains earlier this year. Although November has just begun, the current trend is showing a net negative value, suggesting a pause in the industry's momentum. Under the overall downturn in cryptocurrencies, Ethereum's fund inflows have cooled off. "Although the long-term bias clearly remains bearish, the severity of the October liquidation has made traders hesitant to hold onto short positions firmly, leading the market to be dominated by tactical short-term momentum trading rather than firm directional bets," Newhouse said.