Bitcoin has the potential to fall to $100,000, but the drop will not last long.

Bitcoin fell 4.50% this week and may return to the $100,000 level in the coming days, but data shows that trading below this level may be limited.

In a recent post, CryptoQuant noted that the Realized Net Profit/Loss chart (NRPL), which tracks profits and losses from Bitcoin transactions, shows moderate profit-taking behavior. This activity is significantly lower compared to the spikes during the peak cycles in March and November 2024.

Bitcoin: Actual Net Profit/Loss (NRPL) | Source: CryptoQuantEach of these phases marks severe sell-offs signaling market peaks, but the recent profit-taking has been relatively limited, indicating that the market is not too hot. This is a signal that Bitcoin's upward trajectory is far from depleted.

Another important metric that supports a quick recovery if Bitcoin falls below $100,000 is the short-term fair value at $96,000. This indicator shows the average price at which Bitcoin has recently been traded, serving as a crucial support level.

The reasonable value of short-term Bitcoin holders | Source: GlassnodeIf Bitcoin falls below $100,000, then $96,000 could act as a support level, attracting buyers and limiting the decline. In the past, during bull cycles, Bitcoin has not remained below the short-term reasonable value for long, reflecting the strong belief of holders and market demand.

Altcoin Trader Sherpa believes that the current market conditions are preparing for a recovery in the coming days. He emphasizes the key support zone between $102,000 and $104,500, where BTC had previously consolidated before breaking higher. This trader predicts a recovery that could push Bitcoin above $107,000 next week.

Similarly, technical analyst Titan of Crypto notes that BTC is approaching a key technical support level.

"BTC is returning to the daily Kijun around ~$102,700. This area has been previously held and may serve as a solid base for the next move."

Analysis of Bitcoin Ichimoku by Titan of Crypto | Source: X## The liquidation of open Bitcoin contracts worth 3.7 billion USD has reset the market

The open contract (OI) on the Bitcoin futures market was wiped out by $3.7 billion as the price of BTC fell from $108,000 to $104,500. This can be seen as a healthy market reset, as it reflects the liquidation of excessively leveraged positions, reducing market exuberance.

Bitcoin price, open interest and liquidation | Source: Velo.dataHigh OI often indicates over-leveraged trading, which can amplify volatility. When a slight price fall triggers a large number of liquidation transactions, as illustrated above, it will wipe out speculative positions, stabilizing the market.

Vincent