Bitcoin is struggling to regain momentum.

The top crypto slipped 5% to around $108,100 early on Wednesday after approaching $114,000 on Tuesday. The drop came even as US spot Bitcoin exchange-traded funds recorded nearly $500 million in inflows on October 21, according to SoSoValue data.

The price action reflects a market still caught between structural optimism and a lingering liquidity crunch, Annabelle Huang, founder of blockchain infrastructure firm Altius, told DL News.

“Crypto will need some time to recover from the crash on October 10,” Huang said. “Collectively, more than $20 billion was lost. That’s not something you can recover from overnight.”

Huang said the October crash, one of the largest deleveraging events in years, was amplified by cascading technical failures.

The crash came amidst macroeconomic uncertainties caused by factors like Washington’s trade war with Beijing, and the ongoing government shutdown in the US.

‘Far more developed’

Despite the chaos, institutional sentiment appears more measured.

Jordan Knecht, head of institutional strategies and partnerships at crypto infrastructure firm GlobalStake, told DL News that large investors are viewing the drawdown as “a deleveraging reset rather than a systemic collapse.”

“In the case of Bitcoin and Ethereum, the infrastructure supporting institutional participation — regulated spots and futures, lending markets, custody and lending protocols — is far more developed now than in past drawdowns,” Knecht said.

For institutions with dry powder, the current environment presents a buying opportunity rather than panic, Knecht stressed.

“The liquidation has removed much of the excess leverage, enabling those firms to enter or scale positions with less tail-risk than in earlier cycles.”

And Knecht is not the only one who’s optimistic.

“Last week’s lows are the key to this bull thesis remaining intact,” Tom Bruni, head of markets and retail investor insights at trading-focused social media platform Stocktwits, told DL News.

“As long as Bitcoin does not close below $103,500 and Ethereum does not close below $3,500, traders are looking for a retest of the all-time highs and continued momentum from there.”

Bruni’s first upside target for Bitcoin is $126,000, followed by $150,000 if bullish momentum returns. For Ethereum, he sees $4,900 and $6,300 as key resistance levels.

“Retail is still very bullish,” he said, “but the lack of movement over the last five months has shifted their attention towards other market areas with more momentum.”

Crypto market movers

• Bitcoin is up 0.1% over the past 24 hours at around $108,020.
• Ethereum is down 0.8% over the past 24 hours, trading at $3,850.

What we’re reading

Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email lance@dlnews.com.