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Bitcoin Drops 3.2% from $113K High as $411M Liquidations Rock Crypto Market
Bitcoin – The cryptocurrency market is experiencing significant turbulence as Bitcoin retreats from its recent highs, with a leading market analyst suggesting this correction could signal more than just temporary volatility. The world’s largest digital asset has sparked concerns about whether the current bull run is approaching its end.
Sharp Reversal from Thursday’s Peak
Bitcoin’s rally to $113,510 on Thursday appears to have been short-lived, as the cryptocurrency has surrendered all its gains in Friday’s trading session. The 3.2% correction since the start of Friday has triggered a broader market downturn, catching many investors off guard.
The sudden price drop has resulted in substantial liquidations across the market. Over $202 million was liquidated in just four hours, with $351 million coming from long positions. The carnage extended the 24-hour liquidation total to $411 million, with Ethereum leading the destruction among altcoins.
Historical Pattern Emerges
A prominent market analyst has identified troubling similarities between current market conditions and the 2021 bull market top. The expert pointed out that Bitcoin is displaying the same RSI divergence pattern that preceded the previous cycle’s peak.
In April 2021, Bitcoin reached $64,898 before experiencing a massive correction to around $28,000. The cryptocurrency then formed another higher high, reaching its 2021 peak of $69,000 in November. Crucially, during this period, the RSI was making lower lows despite higher price peaks. Following the November peak, Bitcoin crashed dramatically, eventually bottoming at $15,500 in November 2022.
Current Market Parallels
Bitcoin has recently exhibited similar behavior, with its January peak of $109,354 and August all-time high of $124,457 creating higher high formations. If historical patterns repeat, this could indicate an early bull market top approaching.
Contrarian Perspectives
However, not all analysts share this bearish outlook. Bitcoin has historically responded positively to pessimistic speculation. In June, veteran trader Peter Barndt highlighted a potential double top pattern that could lead to a 75% crash, yet Bitcoin subsequently rebounded strongly to reach new heights.
Additionally, analyst Merlijn The Trader views the recent downturn as merely a retest of January’s resistance levels. He believes Bitcoin is consolidating this area as support before its next upward move. According to his analysis, the next target could be a rally beyond $130,000, representing an 18% increase from current levels around $109,865.
The market remains divided on whether this correction signals the end of the bull run or simply another step in Bitcoin’s volatile journey toward higher valuations.
