Why Bitcoin Crashed Again – Will It Re-test the Yearly Low?

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Bitcoin’s price has once again plunged, failing to hold higher lows as market sentiment turns increasingly bearish. According to CoinGecko, BTC dropped 8% in the past 24 hours, trading at $18,470. This sharp decline occurred amid a deteriorating macroeconomic environment, with investors growing anxious about a potential drop toward $15,000.

Bitcoin’s Recent Collapse and Key Support Levels

Over the past day, Bitcoin tumbled from around $20,000 to below $18,500, marking another painful chapter in its volatile journey. At the time of writing, the leading cryptocurrency is consolidating near the $18,000 level—a critical psychological and technical zone.

A three-month price chart reveals a period of intense volatility, with BTC retracing to levels last seen earlier this month. While the $18,000 mark has held—for now—the broader outlook remains bearish. A decisive break below this support could trigger a wave of liquidations and accelerate selling pressure.

👉 Discover how market sentiment shifts can impact Bitcoin’s next move.

Should Bitcoin fail to reclaim $19,000, the path toward $15,000 becomes increasingly plausible in the short term. The monthly chart reinforces this cautionary tone, showing repeated rejections at key resistance zones. Although there were signs of consolidation between September 13 and 18, bearish momentum now appears to dominate.

Technical indicators further support the downturn. The Relative Strength Index (RSI) reflects weakening buying pressure, suggesting that downward momentum is likely to persist. Meanwhile, the Moving Average Convergence Divergence (MACD) remains below its signal line, reinforcing the bearish structure.

With no major catalysts on the horizon to reverse sentiment, many analysts believe the market may continue to "bleed" lower unless macroeconomic conditions shift.

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Why Institutional Sentiment Is Turning Bearish

Institutional interest in Bitcoin has surged over the past few years, with major financial players like Goldman Sachs offering exposure to digital assets for their clients. However, recent commentary from the bank's analysts signals growing pessimism.

Led by economist Jan Hatzius, Goldman Sachs forecasts further declines for Bitcoin, linking its performance directly to Federal Reserve policy. The firm expects a 75-basis-point rate hike in September, followed by a 50-basis-point increase in November—moves designed to combat persistent inflation.

Rising interest rates typically strengthen the U.S. dollar and push investors toward safer assets like Treasury bonds. As a result, risk-on assets such as stocks and cryptocurrencies face increased selling pressure. This dynamic has played out clearly in 2023, with Bitcoin down over 70% from its November 2021 all-time high.

Moreover, Bitcoin’s correlation with traditional markets—especially the Nasdaq Composite—has strengthened significantly. With tech stocks vulnerable to higher rates, BTC is increasingly dragged lower alongside them.

Sharon Bell, a strategist at Goldman Sachs, warns that recent rallies in equities might be nothing more than a "bull trap." She cautions that aggressive rate hikes could trigger a 26% drop in stock markets—potentially dragging Bitcoin into uncharted territory.

This growing institutional skepticism is also reflected in derivatives markets. Data from the Chicago Mercantile Exchange (CME), highlighted in the Commodity Futures Trading Commission (CFTC) weekly report, shows a surge in institutional short positions on Bitcoin.

Bitcoin Options Signal Deep Bearish Bets

Another concerning sign comes from the options market. Expiring by year-end, current Bitcoin options suggest traders are pricing in a steep decline.

As of September 18, the put/call open interest ratio stands at 1.90—a figure skewed heavily toward bearish bets. While the largest concentration of call options sits at a $45,000 strike price (reflecting long-term optimism), the near-term picture is far grimmer.

Between $10,000 and $23,000 strike prices, there are roughly four put options for every three calls. This imbalance indicates that professional traders are hedging—or outright betting—on a drop into the $10K–$12K range.

Such positioning amplifies downside risks during periods of volatility. If spot prices approach these levels, cascading liquidations and panic selling could turn a correction into a full-blown crash.

👉 Explore how derivatives data can reveal hidden market trends before they happen.

Frequently Asked Questions (FAQ)

Q: Why did Bitcoin crash again recently?
A: The latest drop was driven by rising U.S. interest rates, strong dollar pressure, and growing risk aversion among investors. Technical breakdowns below key support levels also triggered automated sell-offs and margin liquidations.

Q: Is $18,000 a strong support level for Bitcoin?
A: Yes, $18,000 is a critical psychological and technical level. A sustained break below it could open the door to further losses toward $15,000 or lower.

Q: Can Bitcoin recover if the Fed pauses rate hikes?
A: Historically, pauses or dovish shifts in Fed policy have helped risk assets rebound. If inflation cools and rate hikes slow, Bitcoin could stabilize and potentially resume an upward trend.

Q: What do Bitcoin options tell us about future price action?
A: Current options data shows heavy put concentration between $10,000 and $12,000, suggesting many traders expect a deeper correction before any meaningful recovery.

Q: How does stock market performance affect Bitcoin?
A: Bitcoin’s correlation with tech stocks—especially the Nasdaq—has increased. When equities sell off due to macro concerns, BTC often follows due to shared investor bases and risk profiles.

Q: Could Bitcoin re-test its yearly low?
A: Yes. With bearish momentum building and no clear catalysts for recovery, a re-test of the 2023 low near $15,500 is possible. A break below that level would signal even steeper declines ahead.

Final Outlook: Navigating the Downturn

While some investors believe Bitcoin has already bottomed out near current levels, the confluence of technical weakness, macro headwinds, and bearish derivatives positioning suggests otherwise.

The path forward hinges largely on Federal Reserve policy and broader financial market stability. Until there's a clear shift toward monetary easing—or a major adoption catalyst—Bitcoin may remain trapped in a downward trend.

Traders should closely monitor:

Volatility will likely persist, but downturns also create opportunities for strategic accumulation—especially for long-term holders who understand market cycles.

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