Bitcoin Slips Below $112K as Tariff Anxiety Weighs on Sentiment || Oct 16, 2025
Fear & Greed Index hits extreme lows while order books show whales accumulating quietly
🪙 Crypto Market Overview
Bitcoin has continued to drift lower, sliding below the 112,000 USD mark after failing to reclaim resistance earlier in the week. The decline comes as renewed U.S.–China tariff headlines once again spook risk assets — echoing the same pattern seen during last Friday’s sell-off and the February–March correction.
Market sentiment has deteriorated sharply, with many traders questioning whether the bull market is intact or even underway. The Crypto Fear & Greed Index has dropped to one of its lowest readings of 2025, and weighted social sentiment hit its all-time low on Friday — typically a contrarian bullish signal.
Adding pressure, Bitcoin’s weakness coincides with a strong rally in gold, highlighting that liquidity is tightening and risk appetite is fading. Still, such macro-driven rotations can reverse quickly.
📉 Which Way from Here?
Bitcoin is now testing a critical juncture as it flirts with the head-and-shoulders pattern that bears have been trying to trigger for weeks.
So far, every breakdown attempt has failed, but each rebound is getting shallower, suggesting waning strength.
Bulls must reclaim 116,000 USD to invalidate the pattern and spark a short-covering rally toward 120,000 USD.
Failure to do so could activate the pattern, potentially sending BTC lower toward 109,000 USD or worse.
This setup remains binary — a breakout above 116K flips sentiment fast, while a breakdown below 110K could deepen fear further.
🧠 On-Chain Check
Despite price weakness, on-chain activity remains encouraging:
Daily Active Addresses (DAA) remain strong, creating bullish divergence that historically precedes rallies to at least 118,000 USD.
The percentage of BTC supply in profit continues to decline, a healthy reset often seen before larger uptrends.
These signals suggest that while short-term pain remains, the underlying structure is resetting for a potential rebound.
💹 Order Book & Retail Positioning
Spot order books continue to show strong whale accumulation around current levels. Historically, such patterns mark accumulation zones, not distribution.
However, one important condition for upside is missing: retail traders haven’t turned bearish yet. True retail accounts on Binance remain net long, and as history shows, Bitcoin tends to bottom only after retail flips short.
⚙️ Market Indicators
Our internal models show growing bearish pressure, with readings at their highest since March, when tariff tensions last peaked.
This sharp uptick often precedes a final capitulation event or reversal phase, depending on whether sentiment extremes are absorbed by strong bids.
Meanwhile, shorter-term indicators are nearing bullish reversal zones, hinting that a recovery setup could soon form if support holds near 110K–112K.
📊 ETF & Macro Watch
The BlackRock Bitcoin ETF (IBIT) remains a key gauge of institutional sentiment. Its RSI bullish divergence suggests that a bounce may be approaching, though timing remains uncertain.
Strength above 62.95 USD and closes above 63.80 USD would confirm stabilization.
Weakness below 62.30 USD could trigger renewed selling pressure — or, in a contrarian sense, a bear trap if buyers step in aggressively.
Despite improving odds of a Fed rate cut and the potential end of quantitative tightening, tariff uncertainty remains the market’s dominant theme.
🎯 Strategy Outlook
Short-Term (Days): Pending. Sentiment deeply bearish, potential contrarian setup forming. Watch 116K for breakout and 110K for defense.
Medium-Term (Weeks): Long bias maintained; outlook strengthens above 120K. Profit targets remain 140K–160K.
Long-Term (Months): Cycle projection toward 230K remains intact unless 72K fails.
🧭 Strategy Notes
Sentiment collapse may mark capitulation phase, not trend reversal.
Whale accumulation ongoing despite broader market weakness.
Retail positioning must flip short for a sustainable bounce.
ETF flows and macro tone (tariff, liquidity) remain key catalysts.
🔑 Key Takeaways
BTC slips below 112K as tariff tensions weigh on risk sentiment
Fear & Greed Index and social sentiment hit historic lows
Strong on-chain activity hints at eventual rebound potential
Whales accumulating while retail remains overly long
Watch 116K breakout vs. 110K breakdown for next direction
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