Bitcoin’s Drop Below $105,000 Sends Crypto Market Cap to Lowest Level Since July

The cryptocurrency market extended its losses on Thursday as fresh Bitcoin selling sparked a fresh wave of liquidations, pushing major altcoins to multi-week lows.

The slowdown was led by Bitcoinwhich fell 5.6% in the past 24 hours to an intraday low of $104,853, according to CoinGecko data.

The decline pushed the total crypto market cap down 5.9% to $3.64 trillion, its lowest level since July, according to CoinGecko data.

The sell-off appears to have been triggered by a flight to safety amid growing fears about the stability of the U.S. regional banking sector, said Derek Lim, head of research at market-making firm Caladan. Decrypt.

He said the panic originated in traditional finance, where reports of loan portfolio problems at lenders including Zions Bancorporation and Western Alliance triggered a sharp sell-off in bank stocks, which then turned into risky assets, Lim said.

“As concerns spread across the financial sector, risk appetite weakened significantly across all markets,” Lim said. “Naturally, crypto fell as traders launched a flight to safety.”

Altcoins, still fragile following the flash crash of the previous week, suffered significant corrections. Ethereum fell 7.4% on the day, while XRP, Solana, Tron, DogecoinAnd Cardano experienced losses ranging from 4% to 9%. BNB decreased more significantly, dropping 12.3% over a 24-hour period.

The sell-off forced a massive unwinding of leveraged positions. Total market liquidations reached $1.09 billion, with Bitcoin And Ethereum traders make up more than 55% of the total, according to CoinGlass data.

Despite the worrying signals from traditional finance, Lim remains bullish on the broader crypto markets, citing a “bullish market structure.”

Lim’s measured outlook finds some support in market sentiment, as users of the Myriad prediction market, launched by Decrypt Parent company Dastan placed a 66% chance that Bitcoin will close October with more green candles than Ethereum, suggesting underlying optimism about a potential recovery.

However, in the short term, traders remain bearish. A market wondering whether Bitcoin’s next move would take it to $120,000 or $100,000 shows a sharp increase in the odds of the latter outcome, reaching 68% as of Friday morning.