Bitcoin Plunges Below $110K: Here’s What’s Driving the Sudden Crash

Bitcoin's rally hits a wall—hard. The king of crypto tumbles below the $110,000 threshold, leaving traders scrambling and portfolios bleeding.

Market Overheating Finally Cools

Speculative excess had to give. After months of relentless gains, profit-taking kicks in. Large holders cash out, triggering cascading liquidations across leveraged positions.

Regulatory Jitters Resurface

Whispers of tighter oversight spook investors. No concrete policy yet—just the usual shadowboxing between innovation and bureaucracy. Because nothing says 'progress' like a government committee discussing decentralized finance.

Technical Support Shatters

Key levels break in rapid succession. The $115,000 floor? Gone. $112,500? History. Now all eyes watch how deep the correction goes—and whether dip-buyers rush back in.

Macro Winds Shift

Traditional markets wobble, crypto feels the squeeze. Rising yields, inflation fears—the old economy reminders that even digital assets can't fully decouple. Yet.

So is this a healthy pullback or the start of something deeper? One thing's certain: in crypto, today's crash is just tomorrow's buying opportunity—until it isn't.

Bitcoin price analysis

As seen on the chart, Bitcoin price experienced a steady decline, breaking well below the 30-day moving average which acted as resistance throughout the downtrend.

This bearish trend persisted until it reached a low near $110,200 before showing signs of a potential reversal. bitcoin price has since rebounded sharply, breaking out of the descending channel and climbing above the MA marked by the blue line. It is currently trading around $110,938.

Meanwhile, the Relative Strength Index shows an oversold condition around the bottom of the price move, followed by a strong upward momentum. So far, the RSI has crossed above the 70 level, currently reading 70.82, suggesting the asset is now in overbought territory. This could indicate a short-term exhaustion of bullish momentum, possibly leading to a brief pullback.

However, the strong rebound and the breakout from the channel suggest bulls are regaining control, and if the price holds above the MA, a potential recovery could be anticipated.

Why did Bitcoin crash briefly?

Just before the crash, the RSI reached a peak of over 70, indicating that Bitcoin was in the overbought zone. This likely triggered profit-taking and short-term traders exiting positions, which accelerated the drop.

Considering the rally had run out of steam after the Fed’s speech, the declining trend on Bitcoin price continued until buying interest was revived around the $110,200 mark. Not long after it entered oversold territory, it was able to recover briefly from the temporary dip.

The crash itself was also driven large whale sell-off that triggered the flash crash and mass liquidations across the market. On August 26, a single wallet reportedly sold around 24,000 BTC, sparking forced liquidations of more than $940 million in Bitcoin, Ethereum, and other cryptocurrencies