(MENAFN- The Arabian Post) Bitcoin's price dropped below $105,000 early Friday in London trading, recovering marginally later but signalling mounting pressure in crypto markets. Bloomberg data showed a fall of as much as 3 percent before a modest bounce. The slide comes after a week of heightened volatility that has dragged digital-asset valuations lower.

The crypto sector has shed billions. Total market capitalisation fell to its lowest point since July, as institutional and leveraged positions faced heavy liquidations. Ethereum, the second-largest token, also fell sharply, trading under $3,800.

One key driver has been intensifying stress in U. S. regional banks. Shares of Zions Bancorp plunged after it disclosed a $50 million loan impairment, while Western Alliance is embroiled in fraud allegations tied to borrowers. Those troubles have sparked a“flight to safety” across risk assets, nudging investors away from speculative trades.

The collapse in derivatives markets was steep: over $1 billion in long and short positions were wiped out in rolling liquidations, especially on exchanges with aggressive leverage mechanics. The drop below the 200-day moving average-around $107,500-has undermined a long-term support zone, fuelling further anxiety among traders.

At the same time, trading volume surged. Weekly volume for Bitcoin hit its highest level since March, suggesting heavy participation even amid panic. Some analysts see that as a sign of re-accumulation by institutional players, though it remains unclear whether those inflows will stabilise prices.

Technical watchers are eyeing potential floor zones near $100,000, while others suggest $88,000 could act as an“open target” if selling accelerates. Meanwhile, on-chain data reveals that wallets holding between 100 and 1,000 BTC-sometimes called“shark wallets”-are accumulating aggressively, marking the fastest rate of inflow since 2013. Those trends echo previous panic phases, which often preceded longer rallies.

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Some observers caution that Bitcoin's repeated failure to behave as a“safe harbour” during market stress undermines one of its selling points. Still, others argue that the fundamentals remain intact-citing diminishing supply on exchanges, renewed institutional interest, and the durability of blockchain infrastructure.

Volatility is unlikely to subside soon. The week ahead includes major U. S. economic data releases and potential policy statements from central banks that could sway risk sentiment. In parallel, geopolitical frictions-particularly over trade and supply chains-may further rattle markets already in flux.

Arabian Post – Crypto News Network

Also published on Medium.

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