Bitcoin has officially lost its footing below the critical $100,000 level, rattling markets and fueling a wave of fear-driven selling. The move comes after a sharp surge in bearish sentiment, with CryptoQuant data indicating that Bitcoin's latest decline is largely psychological rather than fundamentally driven. Related Reading: Anti-CZ Whale Scores Nearly $100M On ASTER And Altcoin Shorts As Market Sells Off Over the past several days, the market has shifted from confidence to panic at remarkable speed. The Fear & Greed Index plunged to 21 -- deep in fear territory -- just days after BTC briefly tapped $107K. Bullish narratives calling for a $150K-$200K breakout have vanished from social platforms, replaced by anxiety, disbelief, and calls for deeper downside. Google search trends for Bitcoin interest cooled significantly after October highs, mirroring weakening retail enthusiasm. Meanwhile, altcoin sentiment collapsed to extreme lows, hitting -81 as traders capitulated across the board. This emotional swing is not unusual for crypto. With a relatively small market structure and large speculative participation, crypto assets remain highly sensitive to sentiment shocks. In many cases, price movements are influenced more by crowd psychology than by on-chain fundamentals. While the sell-off has been intense, analysts note that network data remains resilient -- raising the question of whether panic, rather than macro reality, is driving this correction. On-Chain Data Shows Strength Beneath the Sell-Off Despite Bitcoin's sharp drop below $100K, on-chain data paints a very different picture beneath the surface. According to a CryptoQuant report by XWIN Research Japan, there is no evidence of structural weakness or network deterioration -- only a sentiment-driven correction. Key network metrics remain solid. Exchange withdrawals have surged, suggesting investors are moving BTC into self-custody rather than rushing to exit the market. Meanwhile, UTXOs in loss have risen to roughly 12%, signaling discomfort -- but still far from levels associated with true capitulation phases in past cycles. This indicates that most market participants remain positioned for longer-term upside. At the protocol level, Bitcoin continues to show strength. Hashrate remains near all-time highs at approximately 1.1 ZH/s, reinforcing network security and miner confidence. Whale ratio has trended lower, pointing to reduced sell-side pressure from large holders. Liquidity dynamics also support a potential rebound. Over $10.7B in stablecoins has recently flowed into Binance, providing substantial dry powder for future accumulation. Realized cap data shows long-term holders trimming some profits, but importantly, incoming demand continues to absorb supply. Overall, the pullback appears sentiment-driven rather than fundamental. On-chain signals suggest the broader uptrend remains intact -- making this volatility a test of conviction, not the start of a structural reversal. Related Reading: Balancer Hacker Now Converting Loot to Ethereum: Stolen Funds Surge To $116.6M Key Support Under Pressure, Short-Term Trend Weakens Bitcoin continues to trade under heavy pressure following its breakdown from the $110,000 range, slipping below the psychological $100,000 level before stabilizing near current support around $101,800. The 4-hour chart shows a clear transition into a lower-highs, lower-lows structure, confirming short-term bearish momentum. Moving averages reinforce this weakness: price is trading below the 50-, 100-, and 200-period moving averages, signaling that bears remain in control. The sharp impulse move down was met with a spike in volume, suggesting panic-driven selling rather than a slow, distribution-based decline. Since then, volume has normalized as price attempts to consolidate above the $100,000 region. This zone now serves as a pivotal demand area -- a break below it could expose deeper downside toward $95,000-$98,000, where stronger historical liquidity sits. Related Reading: Whale Piles Into ASTER Shorts After CZ's Comment - $52.8M On the Line Despite the selloff, Bitcoin is showing early signs of stabilization. The wick below $100K indicates buyers stepped in aggressively at that level, preventing further liquidation cascades. However, bulls need to reclaim the $105,000-$107,000 band to neutralize short-term downside pressure and signal a potential recovery. For now, the trend remains fragile as market sentiment cools and traders reassess positioning. Price stability above $100K is critical -- losing this range could trigger another wave of forced selling, while defending it may set the stage for a relief bounce. Featured image from ChatGPT, chart from TradingView.com