Bitcoin's $120,000 'Roller Coaster': After $1 Billion Liquidation, Is the Bull Market Logic Still Here?
Last week's Bitcoin market can be described as 'thrilling' without exaggeration. It first surged to a historic peak of $123,640, prompting investors to exclaim, 'The bull market has arrived'; however, after the release of U.S. inflation data, the market took a sharp turn downward, quickly falling back to around $115,000. In just one round of 'rising and falling', the market saw over $1 billion in liquidations, leaving many ordinary investors (commonly referred to as 'leeks') caught off guard by this extreme volatility, once again becoming targets for 'harvesting'.
However, a closer examination of this round of adjustments resembles a 'halftime break' within the bull market, rather than a signal of the market's end. From a technical perspective, Bitcoin is currently consolidating within the $115,000-$120,000 range. This sideways movement does not indicate weakness; instead, it is digesting previous gains and accumulating momentum for the next upward movement.
The movements of institutional funds further substantiate this point. Since the second quarter, institutions have not stopped increasing their positions in Bitcoin ETFs, with large amounts of capital continuously entering the market, indicating that professional investors maintain an optimistic outlook for the future market. On-chain data also releases positive signals: the number of active Bitcoin addresses is steadily rising, and the proportion of long-term holders is continuously increasing; these indicators reflect that the market's foundation is being solidified, rather than dominated by short-term speculation.
More critically, changes on the supply side are occurring—the number of Bitcoins currently circulating in the market is decreasing, and institutions showing a clear trend of 'stockpiling coins' means that the supply-demand relationship itself is providing price support. While this $1 billion liquidation has caused losses for some investors, it has also cleared excessive leveraged funds from the market, reducing the potential risks for future market movements and paving the way for a healthier rise.
Moving forward, market attention will focus on the Federal Reserve's policy direction. If more dovish signals can be released (such as pausing interest rate hikes or hinting at rate cuts), the improvement in liquidity conditions will further benefit Bitcoin, greatly increasing the likelihood of breaking previous highs and setting new records.
In summary, this round of volatility is merely a normal adjustment in the mid-bull market. As long as the trend is not broken and institutional funds do not withdraw, there is no need for excessive panic due to short-term fluctuations. For investors, it is essential to view these fluctuations rationally and avoid chasing prices or selling in panic, enabling them to stand more firmly amid Bitcoin's 'roller coaster' market.
