Key TakeawaysBitcoin climbed back above $104,000, rebounding from its first drop below $100,000 since June.Ether (ETH) recovered to $3,460, up nearly 3% as traders eye support near $3,100.Over $1.7 billion in crypto positions were liquidated in the past 24 hours, mostly from long traders.The broader market remains cautious as futures data show reduced leverage and mixed sentiment.Bitcoin Reclaims $104K After Sharp Sell-OffAfter falling below $100,000 for the first time since June, Bitcoin (BTC) rebounded above $104,000, trimming losses from a 20% correction off its October peak near $126,000. The broader crypto market, as tracked by the CoinDesk 20 Index (CD20), fell 2.6% over the past 24 hours but remains up slightly in early Wednesday trading as investors digest recent volatility.Data from CoinGlass show more than $1.7 billion in crypto positions were liquidated over the past 24 hours, with long traders taking the bulk of losses. Despite the sell-off, BTC’s 50-week simple moving average — near $103,000 — continues to act as a key support level that has historically underpinned longer-term recoveries.“Liquidity remains thin, especially in smaller altcoins, which explains the outsized negative price action as markets unwind,” said Jasper De Maere, OTC trader at Wintermute. He added that the weakness reflects ongoing digestion of October’s liquidations, a “slightly more hawkish Fed tone,” and risk-off sentiment across global assets.Market Sentiment Improves but Volatility PersistsThe Crypto Fear and Greed Index now sits in the “fear” zone, reflecting reduced confidence after Tuesday’s steep decline. Analysts note that sentiment may stabilize if Bitcoin continues to consolidate above $103,000 and the US dollar’s recent strength begins to fade.The US government’s reopening and potential progress on crypto legislation are seen as mild near-term positives that could help restore confidence. However, traders remain cautious given recent macro headwinds and thin liquidity conditions.Ether and Altcoins Recover as Traders Rotate Back Into MajorsEther (ETH) regained footing at $3,460, up 3% in the past 24 hours after dropping nearly 20% earlier in the week. Still, traders warn that ETH must maintain support near $3,100 to avoid triggering another wave of liquidations.The altcoin market remains fragile, with several tokens having retraced their entire July–August rallies. Despite this, privacy-focused assets like Monero (XMR) continue to outperform, rising 7% on Wednesday. The Balancer (BAL) token, hit by a $128 million DeFi hack earlier in the week, has stabilized but remains under pressure as security concerns weigh on DeFi sentiment.Futures Market Shows Reduced Leverage and Defensive PositioningThe Bitcoin futures market continues to show signs of caution. Open interest (OI) declined to $25.3 billion from $26 billion last week, indicating that traders are cutting leverage amid heightened volatility. The three-month annualized basis remains around 3%–4%, suggesting muted appetite for carry trades.Funding rates across major exchanges remain low (4–9% annualized), and implied volatility (IV) is elevated across near-term expiries. Despite the turbulence, options data reveal a mild bullish bias, with the put-call ratio leaning 58–42 in favor of calls.Technical Support and Macro WatchpointsBitcoin’s ability to defend its 50-week moving average near $103,000 will be crucial for determining near-term direction. A sustained break above $105,000 could open the path toward retesting $110,000, while a drop below $99,000 would risk renewed selling pressure.Altcoins remain vulnerable due to thin liquidity, but oversold readings suggest that a short-term rebound could emerge if Bitcoin holds current levels. Traders are watching upcoming macro data and Federal Reserve commentary for clues on whether the recent volatility marks a temporary shakeout or a deeper market reset.
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