Bitcoin Drops Under $112K: What Happened This Week
Bitcoin had a rough week. The leading crypto dropped under 112k and traders are feeling the heat. What looked like a strong September rally is now shaking a bit. Some call it just a correction. Others worry it could be the start of a bigger trend. Either way Bitcoin is again showing why it is never boring.
The week opened with Bitcoin holding near 115k. That level felt solid for a while. Bulls were hoping to break higher maybe push closer to 118k. Instead the market flipped. Big liquidations hit leveraged positions. In just one day more than 1.5 billion dollars got wiped out. That kind of selling pressure hit every corner of the crypto market. Ethereum slipped hard. Altcoins like Solana and Dogecoin also dropped. The red wave was everywhere.
Why Massive Liquidations Shook the Market
When leveraged longs get liquidated it means positions are force sold. That creates a chain reaction. Price falls faster than normal. Traders panic. New buyers hold back. The result is what we saw this week. Bitcoin is falling quickly touching lows near 111k before bouncing slightly.
Some analysts say this is not only about leverage. They point to the bigger picture. Macro factors are turning heavy. Talk of a US government shutdown spooked investors. Risk appetite in traditional markets cooled down. Stocks saw selling pressure. Gold moved sideways. And Bitcoin followed risk assets lower.
Macro Factors Adding Pressure on Crypto
Technical signals added more tension. On the daily chart Bitcoin broke below short term moving averages. RSI showed oversold readings but also hinted at divergence. A few traders highlighted this divergence as a potential bottom sign. If momentum slows down while price dips it can mean sellers are losing steam. But it is never a guarantee.
By midweek Bitcoin tried to recover. Price bounced toward 113.9k. That bounce gave bulls some hope. Yet the volume was not strong. A weak bounce after a sharp fall sometimes signals more downside ahead. Still market sentiment is split. Half the traders expect another push down toward 110k. The other half believe the worst is done and recovery will follow.
Technical Signals and Trader Sentiment
Another factor playing out is options expiry. Billions of dollars worth of Bitcoin options are set to expire. Expiry often brings volatility. Market makers adjust positions. Traders hedge bets. The closer we get to expiry the more choppy the moves can be. That is why many analysts warned about the second half of this week.
Beyond technicals and expiry there is also the bigger cycle talk. Some veteran analysts are calling this period the late phase of the bull cycle. They warn of a blowoff top pattern. In past cycles Bitcoin made massive peaks before heavy crashes. The fear is history could repeat. Of course others argue this cycle is different. Spot ETF approval changed the demand picture. Institutions are in deeper now. The structure of the market is not the same as in 2021.
Options Expiry and Volatility Ahead
Sentiment right now feels fragile. Retail traders are nervous. Many who bought above 115k are sitting on losses. Long term holders remain calm. They have seen corrections before. For them dips are part of the journey. On social media the tone swings daily. One day bullish charts flood Twitter. The next day bears post warnings of a 20 percent crash.
Is This the End of the Bull Cycle or Just a Dip?
Looking at key levels is important. Support around 111k is crucial. If that breaks cleanly the next zone is near 108k. Below that the psychological 105k level comes into play. On the upside resistance sits near 113.5k to 114k. If Bitcoin clears that with volume then maybe the bulls take back control. Right now the range is tight but the stakes are high.
Liquidations were the headline of this week but they also reveal a deeper lesson. Too much leverage makes the market unstable. Retail traders often chase quick gains with 10x or 20x leverage. When price swings a few percent those positions get wiped out. The big players use that volatility to their advantage. They force shakeouts and then reload cheaper. The cycle repeats again and again.
Key Support and Resistance Levels to Watch
Another angle is regulation and the global economy. Crypto markets are watching the US closely. If the government shuts down even partly it shakes investor confidence. Fed policy is also in focus. If rates stay higher for longer it keeps pressure on risk assets. Bitcoin though sometimes called digital gold still trades like a high risk asset. So macro news flows directly into price moves.
This week reminded everyone of one core truth. Bitcoin may be decentralized but it does not move in isolation. Global markets matter. Macro events matter. Trader psychology matters.
Lessons from This Week in Bitcoin
Still for long term believers nothing major has changed. Supply halving happened months ago. Institutional adoption is still growing. Companies and funds are adding exposure. Developers keep building around Bitcoin and crypto. Price volatility is part of the DNA of Bitcoin. For them dips are opportunities.
As the week closes Bitcoin is trading near 112k. Traders are watching if support holds or breaks. Bulls need momentum above 114k to breathe easier. Bears want to push it lower to shake out more longs. The tug of war continues.
What to Expect for Bitcoin Next Week
So what should an average observer take away. First do not get carried away by headlines. This week’s drop feels big but in crypto terms it is normal. Second leverage is dangerous. The 1.5 billion wiped out proves it again. Third short term moves are uncertain but the bigger story of Bitcoin adoption still holds.
Going into next week the key things to watch will be macro headlines from the US and the options expiry effect. Also technical levels around 111k and 114k will decide the next trend. If bulls defend support and push higher we may see recovery. If bears break it down deeper correction could come.
Whatever happens Bitcoin once again proved it is a roller coaster. It excites. It scares. It teaches lessons. And it keeps the spotlight on itself.
