Bitcoin breaks below $97,000 amid mounting negative factors...lowest in 6 months

Bitcoin (BTC) is experiencing intensified declines.

On the 13th (local time) on the Binance Tether (USDT) market, Bitcoin plunged about 5% from the previous day, falling intraday to $96,712. This is the lowest level since May.

The downward trend is not limited to Bitcoin and is spreading across major crypto assets. Ethereum (ETH) plunged 9.01% to $3,156, Ripple (XRP) fell 8.21% to $2.27, Solana (SOL) slid 8.49% to around $141. Binance Coin (BNB) dropped 5.36%, Dogecoin (DOGE) 7.47%, and Cardano (ADA) 8.23%, with the market broadly showing weakness.

Market analysts say that recent macroeconomic uncertainty and credit risk are directly weakening investor sentiment. Jerome Powell, Chair of the U.S. Federal Reserve (Fed), drew a line by saying "further cuts cannot be assumed," and as prolonged shutdowns have halted the release of key economic indicators such as employment and inflation, the Fed is finding it difficult to signal policy direction, prolonging an opaque phase, which has acted as a burden.

Credit risk at digital asset treasury (DAT) firms is also cited as a major negative factor. Companies that adopted DAT raised funds through issuance of convertible bonds (CB) and corporate bonds and used those funds to buy Bitcoin and Ethereum, becoming a major demand cohort that drove the crypto market's rise over the past year. However, with increased competition in capital markets due to recent expanded AI investment and increased government borrowing, pressure on credit markets is rising.

Magadini, head, said "As companies adopting DAT have surged, credit demand has expanded excessively," diagnosing that "if credit markets tighten, refinancing will become difficult and they may need to sell held coins to repay debt." He warned, "If coin selling becomes widespread, a downward spiral could occur with subordinated DATs also engaging in chain selling."

Liquidation pressure in the futures market also increased simultaneously, widening losses. According to CoinGlass, about $300 million worth of futures positions were forcibly liquidated on major exchanges in one hour that day. The analysis projects that if Bitcoin falls below $95,000, the cumulative long position liquidations on major centralized exchanges (CEX) could reach $723 million. Conversely, if Bitcoin breaks above $99,000, cumulative short position liquidations are estimated at about $718 million.