Key takeaways:
-
Deep liquidity bids now cluster around $105,000-$100,000, signaling market stabilization.
-
Over 90% of BTC supply remains profitable, confirming a leverage-driven, not panic, sell-off.
-
A reclaim of $117,500 could flip the correction into a breakout rally.
Bitcoin (BTC) is entering what analysts describe as a “clean-up phase,” as deep buy orders begin to cluster below the $105,000 level following a major deleveraging event.
Trading resource Material Indicators said that order book data showed “strong sell pressure on BTC,” with limited technical support around $107,000. While that level might briefly hold, analysts observed that there might not be sufficient bid liquidity to sustain current levels.
Instead, heavier concentrations of buy orders have appeared from $105,000 to $100,000. A move below $105,000 could bring the yearly open at $93,500 back into focus as a longer-term magnet for price.
Meanwhile, blockchain analytics company Glassnode said Bitcoin has begun stabilizing after its recent correction, remaining above the 135-day moving average.
The analytics platform said the Young Supply MVRV, which measures unrealized profits among short-term holders, has “reset toward 1.0.” This implied that the market has cooled off from speculative extremes, as newer investors are no longer sitting on outsized profits, helping reduce the pressure for further selling.
Glassnode also said that the current downturn differs from previous capitulation events. Over 90% of Bitcoin’s circulating supply remains in profit, meaning most of the recent losses came from traders who bought near the top. In previous breakdowns, such as the FTX and Terra Luna crashes, less than 65% of supply was profitable, a sign of broader panic. This time, the correction appears to be a leverage-driven event rather than a widespread sell-off.
Adding to that perspective, Bitcoin analyst Axel Adler Jr. said the market’s behavior during the latest pullback reflected a mature response to volatility. Spot trading volume surged to around $44 billion, futures volume reached $128 billion and open interest declined by $14 billion, yet only about $1 billion of those positions were forced long liquidations.
In other words, Adler seems to believe that roughly 93% of the deleveraging “wasn’t forced,” pointing to a controlled reduction of leverage rather than a cascading liquidation event.
Related: Elon Musk touts Bitcoin as energy-based and inflation-proof, unlike ‘fake fiat’
Bitcoin bulls eye rally to $117,500, but will they get it?
With the market stabilizing, $117,500 is the key resistance level for bullish continuation. A strong daily close and consolidation above this area could quickly turn the recent correction into a renewed rally within the coming week.
However, Bitcoin is likely to trade sideways from $110,000 to $100,000 as it attempts to form a new bottom. The recent low around $101,500, recorded on Friday, may still be tested again before a more convincing range bottom emerges above the $100,000 level.
On a higher time frame, crypto trader Merlijn observed that Bitcoin is currently retesting the multi-year uptrend that has remained intact since 2022. Historically, this trendline has served as a springboard during each correction of the current cycle.
If it holds once again, it would suggest that the broader bull market structure remains intact, and the recent drawdown represents a mid-cycle reset rather than the start of a deeper decline.
Related: 3 reasons why a Bitcoin rally to $125K could be delayed
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
