【Bitcoin Suddenly Plummets! These Key Points You Need to Know】

Bitcoin has caused quite a stir today! It plummeted from a high of $120,000 directly down to $116,000, setting a new three-week low, and the entire market is in chaos — with a total liquidation of $631 million across the network. The current price is fluctuating between $113,000 and $115,000, and the key point is that it broke below the important support level of $117,000, triggering a chain reaction, leading to panic in the community.

Why did it drop so sharply? There are several reasons:

The Federal Reserve has announced interest rate hikes, coupled with escalating international tensions, creating a double whammy that has investors feeling anxious;

Major institutions have also begun to liquidate their positions on a large scale (selling off holdings to reduce risk), leading to a lack of buy orders around $115,000, which worsened liquidity;

On-chain data shows that the "Greed Index" has declined (indicating a shift from euphoria to calmness, even bordering on panic), while large whales have started transferring large amounts of funds, possibly reallocating their holdings;

From a technical standpoint, the price has broken key levels, and combined with poor macroeconomic conditions, these two factors together have caused the drop to be like a runaway wild horse.

For friends looking to buy the dip or stop losses, pay attention to these key points and strategies:

✅ Focus on the "Market Liquidation Zone" at $114,000, where there are sell orders for 320,000 BTC; if the price hits this point, there could be a wave of selling pressure;

✅ Don’t dump all your money at once; it’s recommended to buy 10% of your position every time the price drops by $500 (for example, buy 10% if it drops to $110,000, then another 10% if it drops to $109,500); this staggered buying can reduce risk;

✅ Keep an eye on the funding rate for USDT (currently at 0.03%); if this rate suddenly spikes, it indicates that the cost of borrowing money to trade cryptocurrencies has increased, which could signal a market reversal;

✅ If Bitcoin's volatility drops to around 55%, or if the long-to-short ratio decreases from 1.8 to below 1.4, options volatility reaches 65%, and the daily selling volume of miners falls below 0.35 BTC, these signals coming together could indicate a potential bottom is near, at which point you might consider initiating a hedging plan (such as buying put options to protect against further declines).

$BTC

BTCUSDT

Perpetual

113,532

-1.38%

$ETH

ETHUSDT

Perpetual

3,504.13

-4.81%

$BNB

BNBUSDT

Perpetual

763.51

-2.91%