BTC recovers from massive dip, eyes $120K: Check forecast

The cryptocurrency market experienced its worst crash on Friday, with over $19 billion worth of leveraged positions wiped out. The flash crash saw Bitcoin briefly drop to the $102k region, while Ether tanked to $3,500.

Bitcoin is now showing signs of stabilization at the start of the week, with the leading cryptocurrency now trading above $115. Ether and XRP are also showing similar signs, as they are now trading above $4,100 and $2.57, respectively.

However, traders are cautiously returning to the market amid improved sentiment, with BTC now targeting the $120k psychological level in the near term. 

Bitcoin tops $115k after a massive dip

The cryptocurrency market is recovering from the massive dip experienced on Friday. Bitcoin dropped from roughly $120k to $102k in less than an hour on Friday following President Trump’s announcement on new Chinese tariffs.

The crash saw altcoins suffer bigger losses, with some losing over 50% of their value within an hour. The massive dip saw over $19 billion worth of leveraged positions liquidated from the market, in what many describe as the largest crash in the history of the cryptocurrency market.

In an email to Invezz, Nick Forster, Founder at the onchain options platform, Derive.xyz, stated that the crash was triggered by renewed fears of a U.S.-China trade war, after Donald Trump threatened an additional 100% tariff on Chinese imports. Forster explained that,

“Trump’s tariff remarks immediately sent shockwaves through global markets. Liquidity evaporated across crypto futures as market makers pulled quotes to avoid breaching risk limits.

With order books thinned out, forced liquidations and panic selling had an outsized impact on price, fueling a self-reinforcing cascade of liquidations and accelerating the flash crash.

BTC eyes $120k amid market optimism

The BTC/USD 4-hour chart is bearish and inefficient following Friday’s massive dip. The leading cryptocurrency faced rejection after reaching a new all-time high of $126k on October 6.

It proceeded to lose 11% of its value on Friday, hitting a daily low of $102k from Tuesday’s high to Saturday’s low.

The leading cryptocurrency has now slightly bounced back, adding over 3% to its value in the last 24 hours and now trading around $115,500 per coin. The momentum indicators remain bearish but are improving. 

The Relative Strength Index (RSI) on the 4-hour chart reads 48, nearing the neutral level of 50, indicating fading bearish momentum.

Furthermore, the Moving Average Convergence Divergence (MACD) lines are still within the bearish region but could cross over into the bullish zone as buyers begin to dominate the market. 

If Bitcoin continues its recovery, it could rally higher and test the key psychological level at $120k over the next few hours or days. The all-time high of $126k could become a target once the $120k resistance is surpassed. 

However, if BTC faces a correction after yesterday’s relief, it could dip further towards the next major support level at $107,245.

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