Following the recent interest rate cuts, the crypto markets opened with a strong bearish influence. The price of Bitcoin dropped below $100K after the Federal Reserve Chair made negative comments regarding the national Bitcoin reserve. However, the token quickly recovered, surpassing $102K, indicating that traders may have taken advantage of the opportunity to “buy the dip.” But what caused this sudden downfall?
Liquidations have played a significant role in affecting crypto prices, particularly Bitcoin. As the token surpassed $100K, long positions accumulated heavily above $105K and even reached $107K. These positions were expected to close, leading to a significant pullback. According to Coinglass data, over $782 million in liquidations occurred in the past 24 hours, contributing to the price decline. Despite this, Bitcoin’s liquidity remains above $102K, signaling a bullish outlook in the long term.
The concentration of long positions just above $102K suggests that the price may soon experience a significant pullback once it surpasses these levels. This pressure may lead to price accumulation within this range, potentially triggering a short squeeze that could push prices above $110K.
Meanwhile, Bitcoin’s dominance has made a strong comeback, rising back to 60%. This reversal from expectations of dropping below 50% indicates a potential upcoming trend reversal.
This rebound suggests that the price may reach upper resistance levels, indicating that we are currently in the midst of a bull run. The next bullish wave could potentially propel prices to new highs, although a rejection may trigger a fresh bearish wave later in 2025.
