The euphoria of Bitcoin's ATH against compressed volatility was a coiled spring. The price increase beyond $126k faced profit-taking and weak hands; a 6% drop with a volume of $185B shows institutional dominance. Key supports broken; watch $105k. These are not your dad's BTC cycles.
Now that volatility has increased, the market generally enters an absorption phase. Liquidity is rebuilt, traders reset a balanced exposure, and price action cools before the next defined trend. Consolidation after chaos is how stability returns.
That explanation captures the mechanics of what just happened. Extended volatility compression always builds potential energy, and once a catalyst impacts, the release becomes explosive regardless of direction. The drop had less to do with new information and more with the positioning dynamics that finally broke.