Bitcoin Testing Pivotal Support Levels Below $113,000? Is This the Start of a Major Correction?

Bitcoin’s price has plunged sharply, fueled by a surge in leveraged liquidations and outflows from major spot ETFs. The drop comes after weeks of muted price action, suggesting that bullish momentum may have been overextended. Rising U.S. bond yields, a stronger dollar, and renewed macro uncertainty are adding extra pressure, forcing traders to reassess key support levels. With overleveraged longs wiped out and open interest cooling, many are now debating whether this is a healthy reset or the beginning of a deeper correction phase.

Here’s Why BTC Price Is Plunging

Bitcoin is showing signs of indecision as it hovers near key resistance levels, with on-chain data highlighting mixed signals for traders. Over the past 24 hours, around 460,000 transactions were processed, reflecting stable network activity, while 122,000 BTC shifted across the blockchain, suggesting significant whale or institutional movements. However, it remains unclear whether these flows are exchange deposits (bearish) or withdrawals to cold storage (bullish). 

Active addresses remain moderate, indicating no major surge in retail participation. Meanwhile, Bitcoin’s hashrate dipped by over 6%, hinting at a temporary miner pullback, though not alarming enough to threaten network security. Leveraged long positions on exchanges like Bitfinex continue to build, raising the risk of liquidations if downward pressure mounts. 

Overall, Bitcoin appears to be consolidating, and traders are watching closely: will BTC reclaim momentum toward $68,000–70,000, or could rising sell pressure drag it back toward the $60,000 support zone?

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What’s Next for the BTC Price Rally?

A popular analyst, anonymously known as Stockmoney Lizards, lists the Bitcoin market cycle and believes the BTC price is not done yet. The analyst further writes about the liquidation events, which are one of the recurring themes in Bitcoin’s market structure. Here’s how the playbook usually unfolds. 

1. Initial Pump—Whales Take Profits: As Bitcoin rallies, early players (whales) begin offloading into strength. This creates the first wave of resistance but doesn’t immediately end the uptrend.

2. Low-Volume Continuation – Retail FOMO: The price often pushes higher on weaker volume, driven mainly by retail traders rushing in late. This stage leaves the rally fragile, as institutional demand isn’t backing it.

3. Overleveraged Market—Paper Gains Everywhere:Futures and perpetual contracts pile up with unrealized profits, while liquidity gets trapped in overleveraged long positions. The market becomes imbalanced and ripe for a flush.

4. Liquidity Grab—Market Reset: To move higher sustainably, liquidity (mostly stablecoins) must be freed. The market typically forces a move downward, triggering stop-losses and cascading liquidations to shake out weak hands.

5. Profits for Market Makers: For market makers, these forced moves are highly profitable. Each wave of volatility allows them to capture liquidity and trade against poorly positioned players.

6. Whales Accumulate the Dip: Once the panic selling subsides, strong hands step back in to buy discounted Bitcoin, setting up the next phase of the cycle.

7. The Cycle Repeats: This process plays out consistently. Far from being random crashes, liquidation events are a structural reset that clears the path for the next rally until the broader trend shifts.

Liquidation cascades aren’t a sign of Bitcoin being “done.” Instead, they’re healthy resets in a liquidity-driven market—and often the fuel for the next leg up. 

Wrapping it Up

Mass liquidation events may feel painful in the short term, but as the analyst emphasizes, they are part of Bitcoin’s structural reset before the next rally. Each flush frees liquidity, clears leverage, and allows stronger hands to re-enter at favorable levels. With Bitcoin holding a clear uptrend and whales continuing to accumulate, the outlook remains bullish. Rather than fearing these dips, traders should view them as opportunities—the real fuel for the next leg higher.