The cryptocurrency market recently experienced a significant shake-up, with liquidations exceeding $1 billion across various assets. Bitcoin, the market’s largest and most influential cryptocurrency, took the lion’s share of these liquidations, suffering over $342 million in wiped-out long positions. Despite this sharp downturn, many experts believe that the odds favor a rebound for Bitcoin in the near term, provided it can overcome key resistance levels.

The massive liquidation event followed a highly volatile period in the market, triggered by a public spat between Elon Musk and Donald Trump. Their exchange, revolving around political and economic tensions such as the US debt ceiling and tax bill discussions, led to panic and uncertainty among investors, intensifying sell-offs and forcing many leveraged traders to exit their positions.

The immediate aftermath saw Bitcoin’s price dropping below the crucial $102,000 mark, signaling a sharp correction. However, the liquidation data and technical analysis suggest that this dip might be a temporary shakeout rather than the start of a prolonged bearish trend.

Why Are the Odds Favoring an Upside Move?

According to Alphractal’s Aggregated Liquidation Heatmap, the most intense liquidation activity clustered between $107,000 and $114,000. Within this range, $108,000 and $113,000 emerged as critical zones where many leveraged positions were forced to close. This pressure created a brief oversell scenario, after which short-selling momentum appeared to weaken, hinting that the bears might have momentarily exhausted their capacity to push prices lower.

If Bitcoin drops below $99,000, some analysts warn it could decline further to around $93,000, aligning with the Short-Term Holder Realized Price — a level often seen as a potential bottom during price corrections. This metric tracks the average price paid by holders who have owned Bitcoin for a short period, providing insight into where sellers might capitulate.

On the other hand, the forced liquidation of leveraged long positions above $100,000 may have effectively “reset” the market. This reset reduces overextension on the buy side and may pave the way for bulls to regain control. Bitcoin’s ability to find support just above $100,000 strengthens the argument for a short-term price stabilization.

The Critical Resistance Zone: $113,000 to $114,000

Traders are now closely monitoring Bitcoin’s performance around the $113,000 to $114,000 price zone. This level represents a significant hurdle, as many positions that closed in recent liquidations were concentrated near this area. If Bitcoin can successfully break through this resistance, it might trigger a fresh wave of liquidations—this time of short positions—potentially fueling a further price rally.

However, the political and economic uncertainty fueled by ongoing debates over the US debt ceiling and fiscal policies could continue to unsettle the market. The tension between public figures like Musk and Trump has added to investors’ fear, sometimes leading to erratic selling and reduced confidence.

Despite this, Trump himself posted on his social media platform, Truth Social, expressing that he remained unfazed by Musk’s opposition. His resilience might contribute to a calmer market sentiment, helping investors regain composure.

Bitcoin Retesting the Golden Cross

Another important technical development is Bitcoin’s recent revisit of the Golden Cross level—a bullish indicator where the 50-day moving average crosses above the 200-day moving average on the Bitcoin-to-dollar (BTC/DXY) chart. Historically, this crossover has often preceded sustained upward price movements, including a notable rally earlier this year in November 2024.

If Bitcoin can hold above the $100,000 level and push higher, it stands a chance to retest resistance points at $106,000 and $111,000. These levels will be critical in determining whether the momentum can build to sustain a broader rally.

Conversely, failure to maintain support above $99,000 would likely push Bitcoin back into a downtrend, possibly dragging the price down toward the $93,000 to $97,000 range—a territory that would require cautious investor behavior.

What’s Next for Bitcoin?

Overall, Bitcoin is at a crossroads after the recent liquidation spike. Holding above $100,000 and reclaiming the $103,000 to $106,000 range would increase the likelihood of testing higher levels around $111,000 and beyond. But a decisive breakdown below $99,000 would signal a bearish turn, shifting focus to lower support zones.

Investors and traders will be watching these price points carefully in the coming days, as they could determine the short-term direction of the market. The recent market volatility, influenced by high-profile public disputes and macroeconomic concerns, has created a fragile environment. Yet, Bitcoin’s historical resilience and technical indicators suggest a potential rebound is still on the table.

As the market digests the recent shakeout, the key question remains: can Bitcoin hold the line and bounce back, or will further downside pressures dominate? For now, the balance between bullish optimism and cautious pessimism hangs in the air.