Bitcoin Enters Correction Phase as Price Drops Below $105K

According to CryptoQuant contributor Arab Chain, Bitcoin is undergoing a critical transition phase within its market cycle, marked by the Bitcoin Cycle Phase Score entering negative territory. This proprietary metric, which combines market trend and short-term momentum through a Z-Score, shifted from positive to negative values as BTC’s price declined from $124,000 to approximately $107,000 within a single day. Positive values typically indicate upward momentum, while negative values signal short-term weakness or correction phases, suggesting the market has lost the upward momentum that characterized the first two weeks of October.

The technical breakdown extends beyond the Cycle Phase Score, with Arab Chain noting that a trend_signal of -1 confirms Bitcoin’s price has tumbled below the 200-day moving average. The analyst specified that BTC is likely to remain below this crucial metric until it can decisively break through the $106,780 resistance level. Similarly, the negative Z-score indicates Bitcoin’s price is trading significantly below its short-term average, further confirming the dominance of short-term selling pressure in the current market environment.

Despite the concerning technical signals, Arab Chain offers a more nuanced interpretation of the current market movement. The analyst characterizes this phase as a rebalancing within the ongoing cycle rather than the beginning of a long-term downtrend. This perspective suggests the current pullback follows a strong period of price expansion and represents a temporary pause in momentum before the main trend potentially resumes. Arab Chain concluded that if BTC’s price finds stability above $105,000 in the coming days, the Cycle Phase Score indicator may re-enter positive territory, signaling the end of the ongoing correction phase.

However, not all analysts share this optimistic view. Crypto analyst CryptoBirb recently stated that the current BTC bull cycle is likely approaching its conclusion, noting that Bitcoin is almost 99.3% through its current cycle. This assessment aligns with concerning on-chain data showing Bitcoin network activity recently crashing below the 365-day average, indicating weakening fundamental support for the current price levels. These conflicting interpretations create uncertainty about whether the current correction represents a healthy consolidation or the beginning of a more significant downturn.

As Bitcoin trades near the mid $100,000 level, market participants are growing increasingly concerned about the potential for the digital asset to fall below the psychologically important $100,000 mark. This threshold represents not only a technical support level but also a significant psychological barrier that could trigger additional selling pressure if breached. The combination of negative technical indicators and declining network activity has created an environment of heightened anxiety among retail investors and traders.

Contrasting with retail concerns, institutional and whale accumulation of Bitcoin shows no signs of slowing down. Companies added a total of 176,000 BTC to their treasuries during Q3 2025, demonstrating continued institutional confidence despite the price correction. This substantial accumulation suggests that large players view the current price levels as attractive entry points for long-term positioning, potentially providing underlying support that could limit further downside. The divergence between retail anxiety and institutional accumulation highlights the complex dynamics currently shaping Bitcoin’s market structure.

At press time, Bitcoin trades at $105,484, representing a 5.1% decline over the past 24 hours. The cryptocurrency remains in a precarious position, caught between key technical resistance at $106,780 and psychological support at $100,000. The market now faces a critical test of whether the current correction represents a healthy rebalancing phase, as suggested by Arab Chain’s analysis, or the beginning of a more substantial downturn as indicated by CryptoBirb’s cycle completion assessment.

The coming days will be crucial for determining Bitcoin’s near-term trajectory. A successful reclaim of the $106,780 level could restore positive momentum and validate the rebalancing narrative, while a break below $100,000 would likely trigger additional selling pressure and extend the correction phase. Market participants will be closely monitoring both technical indicators and on-chain metrics, particularly whale accumulation patterns and network activity, for signals about the sustainability of the current price levels and the potential for trend reversal.