Bitcoin's recent dip to $104,000 has sparked debate among analysts, with some viewing it as a healthy "flush" of the market, while others fear it signals a deeper cyclical downturn. The price of Bitcoin temporarily slipped to $104,000 on Friday, October 17, 2025, marking its lowest point in nearly three months. This 5% plunge brought its market capitalization below $2.1 trillion, a 13% decline since October 10.
The downturn can be attributed to a combination of factors, including renewed U.S.-China trade conflict, escalating credit risks among U.S. regional banks, and significant institutional redemptions from spot exchange-traded funds. President Trump's declaration of 100% tariffs on Chinese imports triggered an almost immediate cascade, with Bitcoin falling rapidly before partially recovering after clarification.
Despite the price drop, some analysts argue that the market's reaction indicates a "controlled deleveraging" rather than panic. Derivatives data and positioning suggest speculative long positions were forced out, while spot flows remained steadier, implying long-term holders were largely unfazed. Open interest has returned to mid-year levels, and funding rates turned negative during the flush.
However, the sell-off triggered over $1.2 billion in liquidations across leveraged contracts within 24 hours, with long positions accounting for a significant portion. Total liquidations topped $10.3 billion, with Bitcoin liquidations alone reaching $5.38 billion. Ethereum followed with $4.43 billion in liquidations. Bitcoin ETFs also experienced outflows, with spot funds reporting $4.5 million in net outflows. Ethereum ETFs recorded even larger exits, with $175 million pulled across all nine active funds.
Technicians note that Bitcoin's price has interacted with its 200-day moving average for the first time in six months, while the 20- and 50-day MAs trend lower, typical of a cooling phase after a vertical rally. A break below its 200-day simple moving average signaled deterioration in the intermediate trend.
The broader cryptocurrency market mirrored Bitcoin's decline, with major altcoins like Ether, BNB, XRP, Solana, ADA, LINK, and BCH all posting losses. Ether (ETH) plunged 6.5%. BNB dropped over 12% in 24 hours. XRP fell another 7.5%. The total cryptocurrency market capitalization fell sharply.
Looking ahead, analysts remain divided on Bitcoin's future trajectory. Some believe the bull market remains intact, while others anticipate further declines. If bulls reclaim the $110,000–$113,000 range, a relief bounce toward $116,000–$120,000 is plausible. However, losing the $104,000–$106,000 support level could lead to a test of lower levels. Short-term traders face a bearish bias until $112,000 is reclaimed, but long-horizon investors may see this as an opportunity to accumulate.