Bitcoin Drops Below $105K: BTC Hits Most Oversold Level Against Gold in Three Years
Bitcoin’s recent price action has sent shockwaves through cryptocurrency markets. The flagship digital asset plunged below $105,000 on Friday, marking a decline of approximately 3.7 percent from previous levels. This downturn represents a significant retreat from its recent all-time high and has investors scrambling to understand what comes next.
The selloff comes at a critical moment for the crypto market. BTC is now 16% below its early October record high of above $125,000. More concerning for bulls, Bitcoin has broken below several key technical levels that previously provided support during this year’s rally.
Bitcoin Price Decline Tests Critical Support Levels
Bitcoin plunged below $105,000 in its steepest weekly drop since spring. The cryptocurrency’s price movement has left traders watching crucial support zones. The cryptocurrency fluctuated within a daily range of roughly $104,109 to $109,195, demonstrating significant volatility during the trading session.
Technical analysts are closely monitoring the $100,000 psychological level. Analysts at Glassnode found that BTC stands between key support levels, with a break below $99,900 potentially leading to a much deeper correction. This critical threshold aligns with Bitcoin’s 365-day moving average, historically a significant support zone during bull markets.
Substantial liquidations across the market have accompanied the magnitude of the decline. Billions have been wiped from leveraged positions as traders caught in long positions faced margin calls. Trading volumes surged during the selloff, reaching their highest levels since March 2025.
BTC Oversold Against Gold: Historic Ratio Signals Potential Bottom
Perhaps the most intriguing development in this downturn is Bitcoin’s shifting relationship with gold. According to the 14-day Relative Strength Index, the BTC/Gold ratio shows Bitcoin at its most oversold level since November 2022. This technical signal suggests Bitcoin has significantly underperformed the precious metal in recent weeks.
Gold has exceeded expectations in 2025, rising more than 60% year-to-date to trade at approximately $4,340 per ounce. Meanwhile, Bitcoin has struggled to maintain its momentum. The divergence between these two assets reflects a broader flight to safety among investors facing macroeconomic uncertainty.
Historical precedent offers some hope for Bitcoin bulls. Similar RSI lows in August 2024 and March 2025 preceded 30-90% BTC rebounds within weeks. However, analysts caution that oversold conditions alone do not guarantee immediate reversals. Confirmation from other technical indicators remains necessary before declaring a bottom.
The bitcoin-gold ratio remains in a pronounced downtrend, marked by prominent red candles highlighting seller dominance. The pair recently confirmed a death cross, where short-term moving averages cross below long-term ones, typically signaling further downside potential.
ETF Outflows Drive Bitcoin Below $105K
Institutional sentiment has contributed significantly to Bitcoin’s decline. Over the past day, investors withdrew $536.44 million from bitcoin ETFs, the worst reading since August 1. This exodus from regulated investment products suggests institutional confidence has wavered.
ARKB from Ark & 21Shares saw the largest outflow of the day, losing $275.15 million, while Fidelity’s FBTC dropped $132 million. These substantial withdrawals indicate sophisticated investors are reducing exposure to cryptocurrency markets amid current volatility.
The outflows represent a sharp reversal from earlier optimism. Throughout much of 2025, Bitcoin ETFs had attracted steady inflows as traditional finance embraced digital assets. The current exodus raises questions about whether institutional enthusiasm for Bitcoin has peaked or paused.
Regional banking concerns have added fuel to the fire. Credit worries affecting U.S. regional banks have dragged down broader markets. Bitcoin, increasingly correlated with traditional risk assets, has followed equity markets lower during this period of financial stress.
What’s Next For Bitcoin Price After Drop Below $105K
The path forward for Bitcoin remains uncertain. Several scenarios could play out depending on how price action develops at current levels. Bulls need to see Bitcoin reclaim key moving averages to restore confidence in the uptrend’s integrity.
Analyst Axel Adler identifies $106,000-$107,000 as Bitcoin’s key support range, warning that losing this level could trigger a retest of $100,000. Holding this base would suggest the market structure remains bullish despite recent weakness.
Some veteran analysts view current conditions as a potential accumulation opportunity. Glassnode reports strong net accumulation among smaller Bitcoin holders (1-1,000 BTC) since early October, even as prices slid from $118,000 to $108,000. This on-chain data suggests conviction remains among a segment of the market.
The broader macroeconomic environment will likely play a crucial role. Federal Reserve policy expectations and inflation concerns influence risk appetite across all markets. Bitcoin’s fate may depend as much on traditional finance as on crypto-specific factors.
Conclusion
For now, Bitcoin trades at a crossroads. Combining oversold conditions against gold and strong accumulation patterns offers hope for bulls. However, technical damage from breaking support levels cannot be ignored. The coming weeks will determine whether this represents a buying opportunity or the beginning of a deeper correction.
