Bitcoin and the broader cryptocurrency market are experiencing intense volatility following the largest liquidation event in crypto history. As traders grapple with record-breaking losses, Bitcoin struggles to recover from steep declines, with speculative targets like $100,000 increasingly within reach amid widespread sell-offs. These tumultuous conditions signal a potential market correction, as traders and analysts interpret recent price actions and liquidations as a sign of a broader market "cleanse."
- Bitcoin and altcoins face historic liquidations, with over $20 billion wiped out in 24 hours.
- BTC struggles to rebound from three-week lows, with some analysts predicting further declines toward $100,000.
- The recent turmoil marks the beginning of a market “cleansing,” as euphoric bull-market sentiment evaporates.
Bitcoin (BTC) faltered beneath the key support level of $110,000 on Saturday as the crypto market endured the aftermath of a record $20 billion liquidation event. The fallout highlights the fragility of recent bullish momentum amid a surge in market pressures.
Trader sees start of โcrypto cleanseโ
Market data from Cointelegraph Markets Pro and TradingView reveals BTC/USD trading struggles after falling to recent three-week lows on Bitstamp, with traders cautious ahead of potential further downside moves.
Amid rising fears over the ongoing US-China trade tensions, risk assets felt the pinch. The S&P 500 index declined by 2.7% on Friday, while gold prices surged past $4,000 per ounce, showcasing a classic risk-off environment that smothered crypto market enthusiasm.
Bitcoinโs Relative Strength Index (RSI) fell into deeply oversold territory, with the four-hour RSI reaching levels not seen since early Februaryโs trade war anxieties. This indicates a market under extreme stress, although some traders see potential for a bounce, while others suggest more downside lies ahead.
Market analyst Skew notes that short positions are gradually decreasing, with some passive buying activity emerging via Coinbase, though liquidity remains sparse and spreads wide. This suggests traders are assessing the damage before liquidity fully returns, leading to potential volatility spikes.
โSome passive buying ongoing mostly via Coinbase spot (bit of a Coinbase premium atm too). Spreads across the board are still super wide, MMs probably assessing damage before liquidity returns much later.โ
Another trader, Roman, has expressed caution, warning that the recent strength in the bull market may be fleeting. He warns that the market is in the early stages of a “crypto cleanse,” citing the proliferation of over 30 million altcoins, many of which are scam projects, and noting Bitcoin’s 700% increase from its macro bottom as evidence of an overdue correction.
Liquidations โlikely much higherโ than $20 billion
Market participants who bet heavily on the continued rise of cryptocurrencies suffered unprecedented losses. According to data from CoinGlass, 24-hour liquidations neared $20 billion, predominantly from long positions, underscoring the scale of recent market turmoil.
โThe actual total is likely much higher โ Binance only reports one liquidation order per second,โ CoinGlass noted on social media. Liquidity across order books is severely challenged, with resistance levels stacked around $120,000 and minimal support to halt the potential slide toward $100,000.
Earlier projections suggested Bitcoin could revisit lows around $108,000, with some analysts framing the recent price action as a form of โping pong,โ characterized by rapid swings and volatility. Such dynamics underscore the uncertain outlook for the near-term crypto market.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
