Bitcoin had been on a strong upward rally driven by expectations that the Federal Reserve would cut interest rates soon. However, recent economic data—especially inflation figures—showed that the U.S. economy remains strong, reducing the likelihood of a rate cut. As a result, investors lost their incentive to take risks and began selling.
Additionally, certain government statements weakened investor confidence, such as the confirmation that the United States does not intend to increase its Bitcoin reserves. This sent a negative signal and triggered further selling pressure.
As the price dropped from around $124,000 to below $118,000, large leveraged positions worth more than $1 billion were liquidated within hours. This rapid cascade intensified the decline and pushed prices even lower.
From a technical perspective, Bitcoin broke key support levels around $118,000, while the Relative Strength Index (RSI) remained in negative territory. These technical signals fueled further automated selling by trading systems and bots. At the same time, many investors began shifting liquidity from Bitcoin to altcoins, especially after Bitcoin’s recent strong rally. This rotation added further pressure on immediate demand for Bitcoin.
Currently, Bitcoin is experiencing temporary stabilization, trading between $115,000 and $116,000 as it attempts to establish a new support base. However, there remains the possibility of a short-term rebound back into the $120,000–$122,000 range if strong inflows enter the market. Conversely, the risk of further downside persists—if Bitcoin fails to hold above $115,000, it could retest lower levels around $112,000–$113,000 or slightly below.
