4 Reasons Why BTC Price Can Crash to $100K After New ATH of $111,000

Bitcoin (BTC) extended intraday gains to set up a new ATH of $111,000 on many US-based crypto exchanges such as Coinbase, Bitstamp and so on. Despite this optimistic outlook surrounding crypto markets, the chances of a crash for BTC price are multiplying due to the extended nature of this bull run. Here are four reasons why a correction to $100,000 is likely in the next few days.

Here’s Why Bitcoin (BTC) Price May Crash to $100,000

Although the BTC trading above the $110,000 all-time high is bullish, investors must exercise caution as multiple warning signals are flashing, hinting at a short-term correction.

1. Muted Implied Volatility (IV) is the first and most important reason for the lack of confidence in the recent BTC price rally to new highs.
2. CME Open Interest (OI) and annualized basis have remained low, showing a lack of interest from institutional buyers.
3. Daily Active Addresses (DAA) and Network Growth are dropping, while BTC price continues to climb higher, noting a bearish divergence.
4. Blockchain data shows the MVRV ratio has entered the reversal zone with huge unrealized profits, hinting at a correction.

Apart from the above reasons, BTC price action over the past few weeks is reminiscent of a range-bound fractal that hints at a correction to the range low. In Bitcoin’s case, analyst RektProof is looking for a Bitcoin (BTC) price crash to $100,000.

In a separate Telegram post, RektProof noted, “Finding it difficult to long some of these Alts as BTC trends up.” Due to the rising Bitcoin dominance and continued ascent in BTC price, the analyst notes that he might be “forced to sit out and stay flat UNTIL we form a new mid term range.” He highlights $100,000 as a key point of interest, where the trader could take action.

With this bearish Bitcoin price prediction, let’s explore four key reasons why a correction to $100,000 is more than likely as BTC hits a new ATH.

Bitcoin “Muted” Implied Volatility Hints Uncertainty 

Volmex’s 30-day Bitcoin Implied Volatility Index (BVIV) hovers around 49.73, a 10-month low, while BTC price produces higher highs. This divergence indicates that the investors aren’t sure of a sustained BTC price breakout above $110,000.

CME’s OI & Annualized Basis for BTC Remains Flat

Bitcoin Open Interest on the CME remains below January 2025 lows, showing a lack of interest from sophisticated investors. BTC’s CME annualized basis, the ratio of spot price and futures price, further illustrates this lack of interest.

These indicators highlight how this BTC price rally is driven mainly by a few institutions accumulating BTC for their treasury purposes.

Blockchain Data shows Potential Top formation After Bitcoin Price ATH

Between May 2 and 22, the number of new addresses and daily active addresses interacting with the Bitcoin blockchain decreased. However, Bitcoin price produced higher highs during the same period, noting a non-conformity between investor interest and the recent rally. This bearish divergence shows investors aren’t interested in BTC at current price levels.

Unrealized Profits In Danger Zone, Signal Reversal Likely

Santiment’s 30-day MVRV ratio tracks the average profit/loss of investors that purchased Bitcoin (BTC) over the past month. Currently, this index sits just above 10%, indicating that investors who bought BTC in the past month are at an average profit of 10%. Typically, when the MVRV ratio enters the 10% to 15% range, Bitcoin price triggers a reversal due to profit-taking.

Since the MVRV ratio is in this danger zone, the chances of reversal due to profit-taking are high, which is another reason why Bitcoin price could crash lower.

Bottom Line

Bitcoin’s recent surge to a new ATH of $111,903 has sparked concerns of a potential price crash to $100,000. Some of the reasons for this bearish outlook is due to muted implied volatility, low institutional interest, bearish divergences in blockchain data, and unrealized profits in the danger zone.