#Bitcoin ($BTC ) slipped below $113,000 this week for the first time in two weeks, triggering a wave of liquidations and reigniting fears of deeper losses. More than $113 million in leveraged long positions were wiped out during the decline, underscoring how quickly sentiment has shifted after Bitcoin’s recent rally to an all-time high of $124,176.
While the sell-off rattled traders, analysts argue that historical patterns suggest this correction may simply mark another setup for a rebound.
Panic in the Options Market
The downturn has been felt most acutely in derivatives trading, where Bitcoin’s 30-day options delta skew surged to 12%, its highest level in four months. Normally, the skew fluctuates between -6% and +6%, with readings above 10% indicating extreme fear among market participants.
The last comparable spike occurred on April 7, when sentiment turned sharply bearish before Bitcoin rebounded more than 40% in the following month. This precedent has led some analysts to argue that the current environment may mirror past fear-driven corrections that ultimately gave way to strong recoveries.
What Triggered the Sell-Off?
Three major developments combined to weigh on Bitcoin’s momentum:
1. Regulatory Pressure Linked to Trump-Backed Firm
Reports surfaced that the U.S. Securities and Exchange Commission (SEC) is investigating Alt5 Sigma, a firm connected to World Liberty Financial, co-founded by Donald Trump. The company reportedly raised $550 million through token sales, while Trump disclosed earnings of $57.4 million from the venture earlier this year. The regulatory probe injected fresh political and compliance risks into the crypto sector.
2. Weakness in Tech and AI Stocks
Broader risk markets also faltered, with the Nasdaq 100 falling 1.5%. Sentiment soured after MIT NANDA research revealed that 95% of AI pilot projects at 150 firms failed to generate meaningful revenue. The findings raised doubts about corporate AI adoption, undermining one of Wall Street’s biggest bullish narratives.
3. Economic Jitters and U.S. Tariffs
The U.S. government imposed 50% tariffs on 407 new steel- and aluminum-based products, raising concerns about inflationary pressures. Economists warned of higher consumer costs, particularly for auto parts and plastics. Meanwhile, investor anxiety over U.S. fiscal deficits drove demand for gold, with UBS lifting its long-term forecast to $3,700 by 2026. Risk aversion spilled into the crypto market as investors sought safer havens.
Is the Bull Market Over?
Despite these headwinds, analysts insist that Bitcoin’s structural bull trend remains intact.
Fear-driven sell-offs have historically marked attractive entry points.
Institutional demand from ETFs, corporate holdings, and sovereign funds continues to support long-term growth.
Outflows from equities could strengthen Bitcoin’s role as an alternative investment, particularly in times of macroeconomic uncertainty.
One analyst summarized: “There is no evidence that Bitcoin’s bull run has ended. Traders’ fear often overshoots rational expectations.”
Outlook: $112K as a Key Level
With options markets signaling extreme fear, many believe the $112K–$113K zone could represent a local bottom. If history repeats, Bitcoin may be poised for a rebound that could catch overly bearish traders off guard.
For now, the correction underscores how sensitive Bitcoin remains to both macroeconomic shocks and regulatory developments. Yet, just as in past cycles, deep pullbacks may ultimately serve as a reset before the next leg higher.