The cryptocurrency market is grappling with intensified downward pressure after experiencing the largest liquidation event in its history. Bitcoin (BTC) and a broad range of altcoins have failed to recover from recent multi-week lows, signaling a potential further drop in prices.
On Saturday, Bitcoin tested the critical $110,000 support level, continuing the aftermath of a staggering $20 billion worth of liquidations. According to data from Cointelegraph Markets Pro and TradingView, BTC/USD has struggled to regain momentum following its decline to three-week lows on the Bitstamp exchange.
The recent surge in market nervousness has been influenced in part by escalating tensions in the US-China trade relationship, which have negatively impacted risk assets globally. The S&P 500 index declined 2.7% on Friday, while traditional safe haven assets like gold climbed back above $4,000 per ounce, reflecting a flight to safety.
Bitcoin’s technical indicators also reveal heightened selling pressure. The relative strength index (RSI) on the four-hour chart dropped to levels not observed since the onset of recent trade-related turmoil in February, pointing to an oversold condition.
Market analyst Skew highlighted that short positions are being unwound, with some passive buying activity observed, particularly on Coinbase, which is experiencing a slight premium. However, wide bid-ask spreads persist across exchanges as market makers assess the volatility, delaying a return of liquidity.
Several major exchanges reportedly encountered significant challenges during the downturn, complicating trading conditions. Meanwhile, trader Roman, who had previously expressed caution over the strength of the recent bull run, suggested that the bottom has not yet been reached. He cited the existence of over 30 million altcoins, many of which are scam projects, as contributing to the broader market weakness.
CoinGlass data underscores the severity of the sell-off, indicating liquidations nearly reaching $20 billion in a single 24-hour period, with long positions constituting the majority of these forced exits. The actual liquidation figure may exceed reported numbers, as some platforms, such as Binance, limit liquidation order reporting frequencies.
Order book analysis shows a significant imbalance, with strong resistance around $120,000 and comparatively low support beneath current prices, increasing the likelihood of Bitcoin testing lower levels near the $100,000 mark. This aligns with earlier projections anticipating Bitcoin revisiting the bottom of its local trading range at approximately $108,000 before potentially consolidating.
Overall, these developments point to an ongoing “crypto cleanse,” marked by a correction phase following a prolonged bull market. Investors and traders are advised to remain cautious, recognizing the elevated risks and the need for thorough research before making investment decisions.
Note: This article is for informational purposes only and does not constitute financial or investment advice.
