Over $600M in Bitcoin longs were wiped out as the BTC price slid toward the key $60,000 area, shaking overleveraged bulls and forcing traders to question whether the latest rebound is the start of a real recovery or just a temporary relief rally.
After briefly plunging toward the low $60,000s, Bitcoin (BTC) dropped to around $61,300 on Thursday before staging a sharp intraday bounce of about 5.52%, climbing back to roughly $64,690. The rebound coincided with reports of a ceasefire agreement between Israel and Lebanon, adding a macro and geopolitical layer to an already volatile trading environment.
This sharp move acted as a brutal reset for derivatives markets. On a rolling 24-hour basis, more than $737 million in Bitcoin positions were liquidated, according to derivatives tracking platforms, with long positions bearing the brunt of the damage. Out of that total, over $617 million came from long liquidations alone, highlighting how aggressively the market had been skewed toward further upside just before the sell-off.
The liquidation wave suggests that many traders had piled into leveraged long positions near recent highs, leaving them vulnerable once BTC failed to hold above key support zones. When prices suddenly dropped, cascading liquidations amplified the move downward, flushing out late bulls and leveraged speculators in rapid succession.
Despite the bloodbath in leveraged markets, Bitcoin’s swift 5.52% rebound from the lows has given some traders reason to argue that a local bottom may be forming. Market participant RidaaXBT, for example, suggested that BTC could mount a relief bounce into the 69,000-70,000 dollar zone, framing the recent sell-off as a potentially healthy reset of excessive leverage rather than the start of a deeper, prolonged downtrend.
Another analyst, ZordXBT, pointed to the long lower wick on intraday candles as evidence that buyers stepped in aggressively near the dip. Such wicks often indicate that sell pressure was met with strong demand, preventing price from closing near the lows and hinting at possible short-term support.
However, not everyone is convinced that the worst is over. Trader Hitman42.eth cautioned that the rebound might prove to be a “bull trap,” luring optimistic traders back into long positions before another leg down. From this perspective, the rapid bounce could be interpreted less as a sign of strength and more as a classic bear-market rally designed to reset sentiment and liquidity before further downside.
From a higher‑timeframe perspective, Bitcoin’s weekly chart still paints a cautious picture. Price action continues to trace out what many technicians interpret as a bear flag breakdown, keeping a potential downside target in the 50,000-52,000 dollar region very much in play. The pattern formed after BTC failed to reclaim the upper boundary of the flag structure, and the downside follow-through has been accompanied by growing volume – a factor that often reinforces the validity of a bearish move.
This medium‑term setup means that, even if a relief rally toward 69,000-70,000 materializes, the broader structure may still be fragile. Bears can argue that such a move would simply be a retest of broken support or the upper region of the consolidation range before another push lower.
At the same time, one of Bitcoin’s most important long‑term technical reference points is still holding – for now. The 200‑week simple moving average (SMA), currently sitting near 61,800 dollars, continues to act as a critical line in the sand. Historically, this moving average has marked major cycle bottom zones during previous bear markets in 2015, 2018 and 2020.
As long as BTC trades above the 200‑week SMA, the more aggressive bearish scenario – a confirmed breakdown of the entire long‑term uptrend – remains unconfirmed. A decisive rebound from this level would significantly weaken the bear flag narrative and could even invalidate it, especially if accompanied by rising spot volumes and sustained closes back above key resistance levels.
In that bullish scenario, the next logical upside target for many traders would be a retest of the 70,000 dollar region, which has acted as both resistance and a psychological milestone in recent months. A clean break and consolidation above that zone would be needed to shift market structure more convincingly back in favor of the bulls.
For now, market sentiment is caught between these competing narratives. On one side, the recent liquidation flush and strong intraday bounce support the idea that leveraged excess has been cleared out, paving the way for a more sustainable advance. On the other, the bear flag pattern and the threat of a drop toward the low 50,000s continue to hang over the market, especially if macro conditions deteriorate or risk appetite fades.
The current environment also highlights the risks of high leverage in crypto markets. When funding rates are elevated and long positions heavily outweigh shorts, even a relatively modest price drop can trigger a chain reaction of forced liquidations. This not only accelerates the move but can temporarily distort price discovery, pushing BTC below levels that might have held in a less leveraged environment.
Traders are therefore increasingly focused on risk management rather than simple directional bets. Many are reducing leverage, widening their stop-loss thresholds, or choosing to sit in spot positions instead of derivatives. Others are turning to options strategies, such as protective puts or call spreads, to hedge downside risk while still participating in potential upside if a relief rally toward 70,000 unfolds.
Institutional participants are also watching these technical levels closely. The 200‑week SMA and the 60,000-62,000 support zone are often referenced by funds and trading desks when evaluating whether current prices represent an attractive entry point or a zone to de‑risk. A decisive weekly close below the 200‑week SMA would likely prompt a reassessment of longer‑term bullish theses and could trigger additional selling from systematic strategies.
Macro factors remain a wild card. Shifts in expectations around interest rates, risk‑asset appetite and geopolitical stability can all magnify Bitcoin’s moves. The fact that the rebound coincided with ceasefire headlines underlines how sensitive BTC can be to broader risk sentiment. If global markets turn more risk‑off, Bitcoin might struggle to sustain rallies, regardless of what short‑term technicals suggest.
For investors with a longer time horizon, the current volatility can be both a risk and an opportunity. Historically, large liquidation events and tests of the 200‑week SMA have often coincided with attractive accumulation zones for multi‑year holders. However, this has never guaranteed an immediate V‑shaped recovery; extended periods of choppy sideways action or further downside have followed in past cycles before new highs were eventually reached.
Short‑term traders, in contrast, are likely to focus on well‑defined levels. On the upside, the 69,000-70,000 area is emerging as the key resistance to watch in the event of a relief rally. Below, the 61,800 region (the 200‑week SMA) and the psychological 60,000 mark represent immediate support, with the 50,000-52,000 zone as the main bearish target if the current structure breaks down more decisively.
In the coming days and weeks, how Bitcoin behaves around these thresholds will be critical. A sustained hold above the 200‑week SMA accompanied by rising spot demand could validate the idea that the recent liquidation washout has reset the market for another attempt at the highs. A clean break below that moving average, on strong volume, would instead lend weight to the thesis that the bear flag is resolving lower, opening the door to a deeper correction.
Until the market chooses a clear direction, traders and investors are likely to remain divided between those betting on a short‑term push toward 70,000 and those positioning for a potential slide toward 50,000-52,000. In such an environment, position sizing, leverage control and respect for key technical levels may matter as much as – or more than – simply guessing the next big move.