Bitcoin (BTC) price dropped more than 2% at Wednesday’s Wall Street open, pulling back from a daily high of more than $120,000. The drop, generally considered a liquidity sweep, returned BTC to the $117,500 range, a level that analysts had marked as important bid liquidity.
The action initiated over $500 million in crypto liquidations, with high-leverage long and short positions erased across exchanges. Self proclaimed political analyst going by name, Crypto Seth on X revealed that in total $1.1 billion USD has been flushed. And that the largest single liquidation order happened on Binance.
Meanwhile, analysts such as Michaël van de Poppe indicated the price action was not an actual breakout. Rather, it was probably a brief push and pullback within Bitcoin’s current range.Â
Crypto Virtuos mentioned $113,000 as the likely next target based on Fibonacci retracement levels, expecting a 6–7% short-term downtrend. Despite the dip, he was hopeful in the mid-term expecting a bounce to $138,000.
As Bitcoin dominance is also increasing at the same time, warning bells are sounding in the altcoin community. According to on-chain statistics from Glassnode, open interest in leading altcoins reached more than $40 billion, an all-time high.Â
This surge in leverage has caused warnings of market “froth,” as high open interest tends increase the risk of extreme volatility.
Glassnode warned that such conditions tend to engender a sensitive market setup, in which both upside and downside moves become more and more exaggerated. Traders are presently closely watching how Bitcoin reacts at the $113K support level.
In the short term, Bitcoin can still consolidate or correct before trying to break out once more. Even while long-term sentiment is bullish.
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