Bitcoin's Night of Horror: Just broke the new high of 108,000, and then immediately crashed through 100,000! Full analysis of the reasons!
This wave of Bitcoin market is so exciting! First, it surged to a historical high of $108,899, but then quickly turned around and fell below $100,000 within hours, leaving retail investors stunned, with the market evaporating tens of billions of dollars in just a few minutes. So why did it drop so sharply? Let me clarify for you, brothers.
How did Bitcoin rise?
It was mainly pushed by several factors: large institutions like BlackRock and Fidelity were buying aggressively; the inflow of funds into the spot Bitcoin ETF also hit a new high; the market speculated that U.S. interest rates would fall and the dollar would weaken; plus, the supply of Bitcoin decreased after the halving, making the market tighter.
Why the sudden reversal?
Large holders took profits: Big players who built positions in the $60,000 to $70,000 range saw Bitcoin surpassing $100,000 and quickly locked in profits. Blockchain data shows that $2.4 billion worth of Bitcoin was transferred to exchanges in a short time, and wallets holding more than 1,000 BTC are also reducing their positions.
Overheated derivatives market: Crypto derivatives platforms like Binance and Bybit have seen outrageous levels of open contracts and funding rates, directly leading to a series of liquidations, wiping out over $1.1 billion in long positions, increasing downward momentum.
"Sell the news" behavior: When a country announced Bitcoin as legal tender, the market did not rise but fell instead; this is the "sell the news" behavior, indicating that good news is often priced in ahead of time.
Government wallet activity: On-chain trackers have detected movement from Bitcoin seized by the U.S. government, especially related to Silk Road, raising market concerns about government selling, increasing selling pressure.
Technical indicators and algorithm activity: Bitcoin's price reached a critical technical resistance level of $108,900, triggering automatic sell orders from high-frequency trading algorithms, and indicators like RSI also signaled overbought conditions, suggesting a potential pullback.
Bitcoin is now stabilizing in the range of $97,000 to $99,500. Key support levels are $95,000, $92,800, and $89,000; resistance levels are above $102,000 and $105,000. If the support holds and market sentiment recovers, Bitcoin may push for $110,000 later in the third quarter. If it continues to fall, it could drop to the range of $88,000 to $90,000.
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