- Bitcoin dropped over 2% to around $117,800 after briefly touching $120K, with analysts expecting a dip toward $113K.
- Over $500 million in crypto liquidations occurred in 24 hours, mostly from long positions.
- Glassnode warned of rising market “froth” as altcoin open interest hits new highs, raising the risk of sudden volatility.
Bitcoin took a sharp 2% dive on Wednesday, falling from its daily high above $120,000 to around $117,799. This move is widely interpreted as a classic liquidity sweep, targeting leveraged long positions that had built up during recent bullish momentum. The pullback was anticipated by market watchers, especially with over $500 million in crypto liquidations in the last 24 hours—most of which were longs.
Analysts Predict Retest of Lower Support
Market analysts like Michaël van de Poppe emphasized that the recent spike was not a true breakout but rather a temporary liquidity grab, with BTC now trading back within its previous range. He warned that Bitcoin is likely headed back to retest range lows, reinforcing the idea that the rally to $120K was a false signal.
Meanwhile, trader Crypto Virtuos identified the 0.618 Fibonacci retracement level at $113,000 as the next key support. He anticipates a 6–7% correction to that level before BTC resumes its upward trend, potentially pushing toward $138,000 in the next major rally.
Altcoin Open Interest Signals Market Froth
On the altcoin side, Glassnode raised a cautionary flag regarding the rapid surge in open interest (OI) across the crypto derivatives market. With altcoins leading the current leg of the bull cycle, this increasing OI suggests rising speculation and potential for heightened volatility. Glassnode referred to this as a sign of “froth” developing in the market, which historically precedes major shakeout.
Market Outlook
The crypto market is showing early signs of overheating, with over-leveraged positions and sentiment tipping into the “Extreme Greed” zone. While technical indicators still support the long-term bullish thesis, short-term corrections seem imminent as the market flushes out excess leverage.
