Analysis of Bitcoin's big dump: Why did BTC fall below 113,000 USD, and is the final bottom "here"?

Bitcoin (BTC) experienced a sharp decline this week, breaking below $113,000 for the first time in over two weeks, triggering the liquidation of over $113 million in leveraged long orders in a single day. This drop occurred just days after BTC set a historic high of $124,176, leading the market to begin questioning whether the bull run has come to an end. However, historical data shows that when panic sentiment in the options market surges, it is often accompanied by strong rebound potential.

Triple bearish factors trigger BTC fall

Recently, BTC prices are under pressure, with three core factors behind it:

1. SEC investigates Alt5 Sigma - the company is suspected of fraud and stock manipulation, with a $1.5 billion trading relationship with Trump’s World Liberty Financial, raising concerns in the market.

2. AI Concept Cooling Down - MIT NANDA research shows that 95% of companies failed to achieve rapid revenue growth from AI pilot programs, and the weakness in tech stocks is dragging down the sentiment in the crypto market.

3. U.S. trade tariff impact - A 50% tariff imposed on 407 types of aluminum and steel products has raised concerns about global supply chains and inflation, increasing risk-averse sentiment.

Fear in the Options Market Soars

(Deribit Bitcoin 30-day options Delta skew, source: Laevitas)

The Delta skew of Bitcoin 30-day options (put-call) has soared to 12%, reaching a four-month high. This indicator normally ranges between -6% and +6%, and a value above 10% indicates extreme market fear.

Historically, such extreme panic often does not last long. For example, on April 7 this year, the index soared to 13%, when BTC fell below $74,500, but a month later the price rebounded by 40%, reaching a high of $104,150.

112,000 USD is a key support

From a technical perspective, the current key support level for BTC is in the range of $112,000–$112,500. If it falls below this level, it may trigger further declines. However, if it holds above this area, historical experience suggests a strong rebound may be on the horizon.

In addition, the demand for downside protection in the derivatives market has peaked, which may indicate that the bearish forces are nearing exhaustion.

The long-term bull run structure is still in place

Despite the severe short-term volatility, there is no clear evidence that the BTC long run has ended. Some analysts believe that the outflow of funds from the stock market may instead flow into the crypto market, becoming the fuel for the next wave of growth. On the macro front, if the Federal Reserve signals loosening and the dollar weakens, BTC may once again attract safe-haven and appreciation funds.

Conclusion

The recent fall of Bitcoin is the result of multiple bearish factors resonating together, but history tells us that extreme panic often breeds opportunities for rebounds. $112,000 will be the most important observation level in the short term; if it holds, BTC may restart its upward trend; if it fails, deeper adjustments should be anticipated. Investors should closely monitor the sentiment in the options market and macroeconomic signals, and respond cautiously to the upcoming volatility.