Bitcoin's rapid selloff cuts through support levels as broader risk reset hits crypto markets

Bitcoin's recent selloff rattled crypto traders not for its size but for the speed at which the digital currency sliced through multiple price support levels with little pause, according to analysis from cryptocurrency exchange Kraken.

Pro trader Dentoshi and Matt Howells-Barby, Kraken's vice president of growth, reviewed the decline on Episode 16 of Trading Spaces, a podcast produced by the San Francisco-based exchange.

Howells-Barby framed the move as an extension of a broader risk reset hitting mega-cap stocks, artificial intelligence investments and other assets, rather than a crypto-specific event, the company said in a statement.

IBIT, the iShares Bitcoin Trust exchange-traded fund, recorded its biggest volume day ever with flows skewed heavily toward sell pressure, according to the analysis.

Dentoshi's base case is an initial bounce or consolidation followed by a potential "drip lower" unless macroeconomic conditions improve materially.

She flagged the breakdown as a support liquidation, with three-day candle closes (a technical chart pattern showing opening and closing prices over 72-hour periods) displaying minimal wicks and major reference points, including the 2021 all-time high zone, failing to slow the decline.

Her expected sequence maps to a leg down, consolidation and further breaks until a long, low-volume floor appears, though she warned the market has not yet reached that "dead zone" of exhausted selling.

Ethereum looks structurally worse than Bitcoin, behaving more like a range-bound asset after several price supports were broken, which complicates sustained exposure to alternative cryptocurrencies, the analysis said.

The company highlighted HYPE's isolated strength but noted the token is pressing into heavy resistance and requires a convincing reclaim of higher levels before a bullish view is warranted.

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Kraken urged traders to prioritise process over prediction, treating rebounds as temporary bounces, using smaller profit targets and letting sustained price reclaims guide conviction rather than betting on immediate reversals.

The full episode is available on Kraken's platforms, with analysts recommending traders watch whether Bitcoin stabilizes and consolidates, whether Ethereum regains structural support and whether HYPE can break and hold above resistance levels.

The Recap

• Trading Spaces discussed bitcoin’s rapid drawdown and implications.
• Weekly RSI is oversold but not a standalone buy signal.
• Watch BTC stabilization, ETH structure, and HYPE resistance reclaim.