Bitcoin experienced a dramatic sell-off late Friday, marking one of the most volatile trading sessions in recent months. The cryptocurrency briefly dropped to a low of $105,000 before rapidly recovering to above $114,000 within minutes—a remarkable rebound that highlights the extreme fluctuations characteristic of the crypto market.
The sudden downturn led to the liquidation of billions in leveraged trading positions, impacting investors and traders alike. Reports indicate that during one hour alone, over $3.32 billion worth of leveraged positions were liquidated, with long positions making up approximately $3.24 billion of this total. In the last 24 hours, the cumulative liquidations surpassed $5 billion, representing one of the largest sell-offs in recent memory.
This sharp correction follows a period of substantial gains, as Bitcoin had reached record highs amid an influx of institutional investment. Following its plunge, Bitcoin’s price briefly stabilized around $107,485 before reclaiming the $114,000 level, as reported by Binance data.
Technical indicators suggest a cooldown in Bitcoin’s recent rally. The Relative Strength Index (RSI) has fallen toward the mid-40s, indicating a shift away from previously overbought conditions. Meanwhile, the Moving Average Convergence Divergence (MACD) has turned negative for the first time in several weeks, commonly interpreted as a sign of diminishing bullish momentum.
As a result of the recent price fluctuations, Bitcoin’s market capitalization has decreased to approximately $2.1 trillion, while trading volume surged to above $99 billion as traders reacted to the panic-induced market conditions. Despite the price recovery, Bitcoin remains over 12% down within a 24-hour period and has declined about 13% over the past week, underscoring the severity of the market correction.
Analysts speculate that the quick rebound was facilitated by automated buy orders and robust demand for Bitcoin in the $105,000 to $107,000 range, which is viewed as a critical short-term technical support zone. As prices fell to this level, algorithmic trading and institutional buying reportedly contributed to the swift recovery.
However, expert opinions caution that the momentum in the market remains tenuous. One analyst emphasized the importance of maintaining a trading price above $110,000 to avert renewed selling pressure. A drop below the $100,000 mark, a significant psychological threshold, could potentially instigate another wave of long liquidations, further complicating the outlook for investors.
