Bitcoin Update: 5 Key Insights from This Week’s Liquidation Highs

Bitcoin Divided on the $112,000 Support Test

After a relatively quiet weekend, the Bitcoin price dropped sharply, touching $112,000 on Monday. This decline has divided traders on what happens next. Some predict another test of support around $100,000, while others hope for a bounce toward new local highs.

“Key level being retested – after reclaiming it earlier this month,” reacted trader Jelle, who calls for a quick return to the $116,000 zone. However, others like trader Captain Faibik anticipate a new leg down that could take Bitcoin toward $100,000.

This sudden volatility illustrates the tension currently dominating the market, with traders split on the future direction of Bitcoin.

$1 Billion in Liquidations, a Bearish Record for 2025

The drop to $112,000 had a significant impact on traders’ positions, with over $1 billion in liquidations recorded in just 24 hours. This marks the biggest bearish movement of 2025, highlighting the high level of leverage in the market.

According to CoinGlass data, long positions accounted for $1.62 billion of these liquidations. This triggered the closing of nearly $2 billion in open interest, as highlighted by trader Daan Crypto Trades.

Some investors like Ted Pillows even anticipate another test of the liquidity zone around $106,000-108,000 before a potential rebound. This wave of liquidations illustrates the fragility of the current market, with traders highly exposed to sudden price fluctuations.

Markets Closely Watching Fed Announcements

Beyond Bitcoin’s volatility, markets remain attentive to decisions from the U.S. Federal Reserve. This week, investors will carefully scrutinize statements from Fed Chairman Jerome Powell, as well as data on the Personal Consumption Expenditure (PCE) price index.

Following last week’s rate cut, markets are hoping for a more accommodative tone from the Fed, which could benefit risk assets like Bitcoin. However, division within the monetary policy committee could complicate matters, with inflation control remaining a priority.

These Fed announcements will therefore be closely monitored by crypto traders, who will look for indications about the future trajectory of interest rates and their potential impact on the Bitcoin market.

A “Huge Policy Announcement” in the Works?

Rumors of a major U.S. policy announcement this week that could impact Bitcoin and altcoins are circulating on social media. While the exact nature of this announcement remains unknown, some observers like Dennis Porter, CEO of Satoshi Fund, claim it will “redefine Bitcoin’s political trajectory.”

The crypto sector remains highly sensitive to such announcements from U.S. political spheres. The government’s “Strategic Bitcoin Reserve” project, though not yet materialized, remains on people’s minds and could resurface. Some analysts like Alex Thorn believe the market hasn’t fully priced in this possibility yet.

Whatever the nature of this announcement, investors will closely follow developments, as they could have significant implications for Bitcoin’s future.

Signs of “Pre-Euphoria” Before the Bull Market Peak?

Beyond short-term fluctuations, a recent CryptoQuant analysis reveals that the market may currently be in a “pre-euphoria” phase, typically preceding a major bull cycle peak.

According to data on the MVRV (Market Value to Realized Value) ratio, the profitability of long-term holders (LTH) differs from that of short-term holders (STH), reflecting an increase in the profitability of “hodl” positions.

This divergence has historically preceded previous market peaks. Although the current level hasn’t yet reached the extremes characteristic of previous cycles, analysts believe significant upside potential remains and that the cycle peak is still to come.

With record liquidations, Fed announcements, political rumors, and “pre-euphoria” signals, the Bitcoin market is currently under high tension. These key events will undoubtedly shape Bitcoin’s future trajectory in the weeks and months ahead. Crypto traders must remain vigilant and informed to best navigate this constantly evolving landscape.

Related articles:

• Rex-Osprey’s XRP and DOGE ETFs See Successful Launch with $54 Million in Volume
• Aster DEX Token Skyrockets 500% : Is This the Next x100 Gem ?
• Solana Hits $250 : Is a New All-Time High on the Horizon ?