Crypto Market Rebounds to $3.5T After $2B Liquidations

The cryptocurrency market has rebounded to a $3.5 trillion market capitalization with a 3.5% gain in 24 hours, according to CoinGecko data, following one of the largest leveraged position flush-outs this year. The recovery comes after more than $2 billion in total crypto liquidations during yesterday’s flash crash, mostly from long positions, representing a significant clearing of overleveraged traders. Bitcoin briefly dipped below $100,000 for the first time since May, creating panic among investors before stabilizing at $103,824.

This massive liquidation event appears to have marked at least a temporary bottom for cryptocurrency markets, clearing out skittish investors and setting the stage for potential recovery. The 24-hour price action shows resilience despite elevated trading volume, indicating cautious optimism among market participants. The event represents one of the largest single-day liquidation events this year, creating what many technical analysts consider a potential turning point after extreme selling pressure.

Bitcoin’s technical analysis reveals conflicting signals that suggest both opportunity and caution for traders. The Relative Strength Index (RSI) for Bitcoin sits at 38 points, placing it in oversold territory where readings below 30 typically signal extreme selling exhaustion. This RSI level indicates that selling pressure is waning and often attracts bargain hunters looking to build positions at discounted levels.

However, the Average Directional Index (ADX) reading of only 20.33 barely suggests any trend exists at all. With ADX measurements, readings above 25 indicate strong trends while below 20 signals choppy, directionless action. Bitcoin’s weak ADX reading means the market currently lacks conviction and clear directional momentum. The Squeeze Momentum indicator firing short confirms the recent breakdown released compressed energy, suggesting consolidation before the next major move.

The exponential moving averages present another concerning technical pattern. While the shorter-term 50-day EMA sits above the longer-term 200-day EMA—normally a bullish configuration known as a ‘golden cross’—Bitcoin’s current price is trading below both averages. This setup typically indicates a panic episode, and if prices don’t recover quickly, the 50-day EMA could start moving downward toward a ‘death cross,’ which would signal potential long-term trend reversal.

Despite the technical uncertainty, prediction market data from Myriad—built by Decrypt’s parent company Dastan—shows cautious optimism among traders. Myriad users currently indicate a 67% probability that Bitcoin will return to $115,000 rather than bleeding down to $85,000. This sentiment contrasts with some analysts who have been slashing price targets amid the recent volatility.

Traders are closely watching several critical technical levels that will determine Bitcoin’s next major move. Immediate resistance sits at $105,000, representing both a former support zone and psychological level. Strong resistance appears between $108,000-$109,000, which served as a recent consolidation zone and major rejection area. On the support side, immediate support rests at $102,000—the recent low and accumulation zone—while strong support exists at the psychological $100,000 level, which also represents a major options strike concentration.

Most indicators—including the weak ADX, bearish Squeeze momentum, and current price below both EMAs—suggest Bitcoin needs to find a lower base before any sustainable rally can begin. The salvation for bulls depends on two premises: prices finding support around the $90,000 mark before bouncing back, and this not marking the start of a crypto winter with multi-month bearish behavior. Technical analysts suggest watching for a decisive daily close above $105,000 with strong volume to confirm reversal toward $110,000, while failure to hold $102,000 could trigger a retest of the critical $100,000 level.