Bitcoin has faced significant turbulence recently as it strayed from its all-time high of $124K.

As the price drops, market sentiment has shifted, igniting fear among traders and investors alike.

At the time of writing, Bitcoin was trading at $111,398, reflecting a more than 3% slip over the past 24 hours.

This descent has raised concerns about whether Bitcoin can hold the crucial support level of $105K.

The current market dynamics reveal a complex picture.

Smaller holders seem to be re-entering the market, accumulating Bitcoin, while larger wallets are distributing their assets.

This creates a standoff in the $105K range, where psychological and technical factors intersect.

If buyers at this level can defend it, there is potential for market confidence to rebound.

However, a failure to maintain this support could invite further fear-driven selling, leading to deeper corrections.

One of the key indicators to watch is the NVT ratio, which recently fell to 33.8 after dropping nearly 11%.

The NVT ratio compares Bitcoin's market capitalization to its transactional value, and a declining ratio can signal weakening transactional strength relative to its valuation.

This imbalance points towards a reduction in organic demand, which could serve as a warning for traders.

If this downward trend continues, Bitcoin might struggle to maintain stability above essential support levels, despite some holders' commitment to accumulating.

On-chain activity further illustrates the cautious sentiment surrounding Bitcoin.

The transaction count has dwindled to 97K, while network growth has dropped to 72K.

These steep declines suggest a decrease in active users and lower adoption momentum, indicating a significant reduction in overall market engagement.

The sharp contraction in these metrics after reaching record highs highlights a slowing demand for Bitcoin.

Without a rebound in activity, Bitcoin may find it challenging to sustain higher valuations as the pool of active participants shrinks.

Market emotions have also taken a bearish turn.

The weighted sentiment has dropped to -1.06, and social dominance has slipped to 25.56%.

These metrics indicate a reduction in confidence and suggest that Bitcoin's presence in market discussions is waning.

Typically, lower dominance aligns with capital rotating into altcoins or capital exiting the cryptocurrency space altogether.

The combination of negative sentiment and declining dominance will likely amplify market volatility.

If sentiment fails to recover, it could lead to psychological pressure that fuels further downside momentum.

In summary, Bitcoin's current outlook appears bearish, despite some signs of accumulation from smaller wallets.

The decline in the NVT ratio, shrinking network growth, and negative sentiment overshadow any resilience seen in the market.

As a result, the critical $105K support level may eventually give way if these trends continue.

Short-term rebounds are still possible, but the broader trend leans toward deeper corrections before any sustainable recovery can take place.

The cryptocurrency market remains volatile, and investors must stay vigilant, keeping an eye on these critical metrics to gauge Bitcoin's direction.

As Bitcoin navigates this turbulent phase, its ability to maintain support levels could ultimately determine its near-term fate in the evolving landscape of cryptocurrencies.