Bitcoin crashes to $105,000 before rapid rebound; why the market plunged and what triggered the bounce

Bitcoin faced one of its most violent sell-offs in recent months late Friday, briefly plunging to $105,000 before rebounding above $114,000 within minutes, a swing rarely seen in the cryptocurrency’s history. The sudden crash wiped out billions in leveraged positions and sent shockwaves across the broader crypto market. According to Coindoo, more than $3.32 billion worth of positions were liquidated in a single hour, with long positions accounting for $3.24 billion of the total. In the past 24 hours, liquidations have exceeded $5 billion, making it one of the largest wipeouts in recent weeks.

A sharp correction after record highs

The massive sell-off highlights how volatility continues to grip the crypto market despite months of institutional inflows and record-breaking highs. Following the drop, Bitcoin briefly recovered to around $107,485 before reclaiming the $114,000 mark, according to Binance data.

Technical indicators point to a temporary cooldown in the rally. The Relative Strength Index (RSI) dropped toward the mid-40s, suggesting the asset has moved out of overbought territory, while the Moving Average Convergence Divergence (MACD) turned negative for the first time in weeks, often seen as a sign of fading bullish momentum.

Bitcoin’s market capitalization has now slipped to roughly $2.1 trillion, while trading volume spiked above $99 billion as panic-driven orders flooded exchanges. Despite the brief rebound, Bitcoin remains down over 12 per cent in 24 hours and about 13 per cent over the past week, underscoring the scale of the correction.

Why did Bitcoin bounce back?

Analysts believe the swift rebound was likely driven by automated buy orders and strong spot demand near the $105K–$107K range, a zone considered short-term technical support, Coindoo reported. Once prices dipped into that range, algorithmic trading and institutional buying appear to have kicked in, fueling the quick recovery.

However, experts warn that momentum remains fragile. “The market needs to hold above $110,000 to avoid renewed selling pressure,” one analyst noted, adding that a break below $100K, a key psychological level, could trigger another wave of long liquidations.