What Caused the Sudden Crash and Fast Recovery?

[intrader]

Did anyone else notice the sharp move this morning? Seeing Bitcoin drop to around $60,000 was surprising, especially after the slow decline we’ve had since last year’s peak.
It looked like a classic liquidation cascade, where too many leveraged positions were forced to close at the same time. What stands out even more is the strong rebound back toward $71,000 later in the day. This suggests there was significant “buy the dip” demand waiting at lower levels.
We’ve seen similar V-shaped recoveries in previous cycles, often near local bottoms when selling pressure becomes exhausted. However, these moves can also turn out to be temporary relief rallies if broader market conditions remain weak.

Do you think this move represents a capitulation event, or just another relief rally before continuation lower?

[FirmWars]

The crash was not just suffered by Bitcoin but gold and others stocks also experienced a sharp fall on that Monday that market started to turn red up until yesterday when Bitcoin dropped to $60k. Reason for the crash is economic wise according to the news I saw. Since Bitcoin is experiencing the bear season, it's possible that this bounce from $60k to $70k might not remain for the longest of time, until the last quarter of this year, Bitcoin might not surge above $90k and below $50k.

[BitMaxz]

The crash was not just suffered by Bitcoin but gold and others stocks also experienced a sharp fall on that Monday that market started to turn red up until yesterday when Bitcoin dropped to $60k. Reason for the crash is economic wise according to the news I saw. Since Bitcoin is experiencing the bear season, it's possible that this bounce from $60k to $70k might not remain for the longest of time, until the last quarter of this year, Bitcoin might not surge above $90k and below $50k.

I agree here; it seems the whole market is down, not only in Bitcoin. I am monitoring the US100, or Nasdaq. When comparing Bitcoin and Nasdaq, they have similar price action for almost 2 weeks.

However, Bitcoin is still supposed to be bearish based on the historical data, so it's normal we experience some sudden price dumps? About the recovery, I don't see any reason, but I think it's normal to see those recoveries since $60k is a pretty cheap price; big players would be interested to buy at a cheaper price. It might be the reason for the recovery, but I'm not sure yet if this wave is final; it might be just a retrace, and later bearishness continues.

[Bitcoin_Arena]

Classic Bitcoin volatility whenever there is a sharp dump. If you have been near the Bitcoin market for long, this shouldn't be surprising. Remember that dump in March 2020?
The markets get messed up, especially the futures/derivatives markets, where there is a cascade of liquidations and stop losses getting triggered. Meanwhile, some people end up attempting to long with very high leverage positions. Most of the time, they are also not spared 

[Stalker22]

While the $71,000 retest is nice to see, be cautious not to become overly confident in a fast bounce; without turning $74,000 into long-term support we are only experiencing a short-term relief rally coming from the 40% drop from prior highs.  We are still seeing heavy institutional selling through ETFs, the macro guys are still worried about what the Federal Reserve does next, and one green candle has not erased their fears.

[OgNasty]

Typically that is the sort of thing you see when the price drops enough to force liquidations. The forced liquidations drop the market below what it would be under normal circumstances. Then when the liquidating stops, it returns to where it would be without the necessary leverage cleanup.

[boyptc]

However, Bitcoin is still supposed to be bearish based on the historical data, so it's normal we experience some sudden price dumps? About the recovery, I don't see any reason, but I think it's normal to see those recoveries since $60k is a pretty cheap price; big players would be interested to buy at a cheaper price. It might be the reason for the recovery, but I'm not sure yet if this wave is final; it might be just a retrace, and later bearishness continues.

It's normal to see these price dumps and very usual for Bitcoin. But I think that it had came too early to prove that we're actually bearish now.

Looking at the better side of this incident is that, this might have come too early and so the market has a long process of recovery for all of this year.

Yet, still be mindful that another series of dumps could come and we shouldn't be too confident in it. Because there might be another series of flash crash that no one is expecting.

Hopefully, this wave is final but for the sake of the market's volatility. Think that there's more coming.

[STT]

I wrote it down yesterday but its generally true this fast move is not one day but the end of a sequence of moves.   This is how I relate price movement especially in something like a commodity market to a bull whip move; the end of the linked leather chain famously moves at the speed of sounds resulting in the distinctive crack of the whip.  The chain of movement that begins at the handle is amplified and moves ever faster, its totally surprising how this happens but its not a one off in markets it will occur again.

The other take regardless of my attempts to describe the motion is the bottom price is very close to the 200 week moving average.  This is a simple average known and followed by Bitcoin traders over a great many years now, its well known and also the 200 day average too but weekly gives it alot more volume accumulation hence the notable sharp bounce and buying in that place.  

[Nwada001]

The market move in the morning dropping to $60k put some pressure on my body, as I was all convinced that once bitcoin goes below that, we are landing at $55k, but it did not eventually happen. The price was moving as if there was a plan to clear out both long and short traders on both sides. Now we are back to a little green level. According to Bybit, in the last 24 hours, BTC has already recovered more than 11% of its current lost value.

[EFS]

I don't think there was anything surprising. We were already in a downtrend. In Bitcoin's history, there have always been big drops and recoveries like this. Since futures appeared, this has been happening more often and more sharply. It's a good lesson for those who try to trade without actually holding coins. Spot isn't affected that much. There's no shortage of news in the world to use as an excuse for a drop as well.

[free-bit.co.in]

The crash was not just suffered by Bitcoin but gold and others stocks also experienced a sharp fall on that Monday that market started to turn red up until yesterday when Bitcoin dropped to $60k. Reason for the crash is economic wise according to the news I saw. Since Bitcoin is experiencing the bear season, it's possible that this bounce from $60k to $70k might not remain for the longest of time, until the last quarter of this year, Bitcoin might not surge above $90k and below $50k.

Yes, not just Bitcoin, but the entire global financial market including gold, stocks, and oil, all fell sharply on the same day. This is a rare phenomenon in the financial market over the past several years, and it resembles a wave of profit taking by large investors, IMO.

However, regarding Bitcoin predictions. I think you are being quite subjective in assuming that Bitcoin will not fall below $50k. As you said, the price decline is due to economic factors, and that means if the macroeconomic situation worsens, it is entirely possible for Bitcoin to fall below 50k. That is entirely possible and should not be ruled out simply because we do not want it to happen.

[BitMaxz]

It's normal to see these price dumps and very usual for Bitcoin. But I think that it had came too early to prove that we're actually bearish now.

Looking at the better side of this incident is that, this might have come too early and so the market has a long process of recovery for all of this year.

Yet, still be mindful that another series of dumps could come and we shouldn't be too confident in it. Because there might be another series of flash crash that no one is expecting.

Hopefully, this wave is final but for the sake of the market's volatility. Think that there's more coming.

What are your preferences to consider when we are in a bearish market? Actually, bearish started last November, 2025. We are still experiencing new lower lows if we check them on a weekly time frame.
The sudden price dump these days might not be final; no one can be able to know the future, so for me, we are still in a bearish market.
For me, I am looking for a long consolidation where the bearish can go much further. For now, the market still moving so I still expecting to see more waves coming.

[Beparanf]

It’s just simply many is selling when the time crash the market and new buyer enter to recover the price back.

There’s also a lot of open orders setup on 60K level that push the price up immediately when the sell off hits that specific price. There’s no big news that affects the price to result with this strong volatility which means it’s a just simple price action between buyer and seller probably due to technical analysis.

[STT]

Federal reserve shock selection (speculatively) and also a gravity towards the 200 week average, the price of course is not always accurate but can just reflect a rush of 'weak hands' and other speculative forces.
  Not all prices are equal, the market is always non linear in the way it moves through some prices more easily then others.   When we do see a rapid change in price it usually means a failure of support in some way, expectations by some in the BTC price action were not met hence a sell off, buyers turn to sellers in the free float market for BTC spot price.

Big point to note for me personally anyhow is the price right now has not recovered its weekly average; hence for me this does not yet qualify Bitcoin as in recovery or even as possessing a positive trend just yet.
 The fight is likely to go on until at least something like 75k is being bought actively.

[JeffBrad12]

The sudden crash doesn't really need explanation and the fast recovery is because the market decided that the price is highly undervalued.
Just remember that when there is a crash and the crash just got too deep it seemingly abnormal, there is a high chance people buying back in masses and the price will swiftly recover.
That just how the market works.

[yixichloro2xx]

Not only Bitcoin though most of all markets are also experiencing this crash, I feel it maybe due to the events that are currently happening in the globe  example Trump's Tarrifs, Greenland, global tension etc. So these stuffs might make big whales sell their holdings for now. Then wait till every where is calm before pumping in Money into the market. Was it not last that over trillions of dollars was wiped out of the gold market. I am very confident that the market will surely recover but it won't so soon , it might take alot of time before it happens and we are still at the second month of the years.

[Pandu Geddon]

Do you think this move represents a capitulation event, or just another relief rally before continuation lower?

We don't know for sure yet, but in my opinion, what happens in this situation is that there is a higher likelihood that the price will move down after returning above $70k. The support from purchasing power is probably not strong enough at the current price, and it will be difficult to push the price up in a short time. There is a tendency for sideways movement for a while, but if it's not enough to create a pump, what will happen is a decline. It could possibly drop below $60k if it occurs.

[armanda90]

As usual moment when bitcoin getting sudden crash always has fast recovery, before bitcoin dropping to $60k has great moment bitcoin raise higher price above $120k and suddenly dump to $102k but success recovery in short moment up to $115k. The same moment right now when bitcoin dropping until $60k without few days bitcoin have been success break out more than 20% by raising to $71k and looks how faster bitcoin recovery after sudden crash.
Usually if bitcoin raise up slowly has downtrend not really faster but interested for the scalper who trading in bitcoin get faster profit after bitcoin huge decreasing and without long term success recovery back to the higher price.

[lizarder]

Did anyone else notice the sharp move this morning? Seeing Bitcoin drop to around $60,000 was surprising, especially after the slow decline we’ve had since last year’s peak.
It looked like a classic liquidation cascade, where too many leveraged positions were forced to close at the same time. What stands out even more is the strong rebound back toward $71,000 later in the day. This suggests there was significant “buy the dip” demand waiting at lower levels.
We’ve seen similar V-shaped recoveries in previous cycles, often near local bottoms when selling pressure becomes exhausted. However, these moves can also turn out to be temporary relief rallies if broader market conditions remain weak.

It's not just Bitcoin that's seen such a significant drop in the near term most stock markets and gold are experiencing similar events. I see the current drop as being due to global economic tensions, war and other conditions, but furthermore this is a common occurrence, though it shouldn't be as deep as this one. Smart investors understand these kinds of downturns and they open orders at entry points, creating a rebound pattern after such a significant drop.

Momentum like this is rare, so when people have special funds to accumulate more, it will be much better because we often consider this as a discount when there is such a sharp decline and perhaps the market does not always react like this, so this is the momentum that experienced investors have been waiting for. This is different from investors who do not understand the condition of Bitcoin because usually conditions like this will make them panic.

[dunfida]

Did anyone else notice the sharp move this morning? Seeing Bitcoin drop to around $60,000 was surprising, especially after the slow decline we’ve had since last year’s peak.
It looked like a classic liquidation cascade, where too many leveraged positions were forced to close at the same time. What stands out even more is the strong rebound back toward $71,000 later in the day. This suggests there was significant “buy the dip” demand waiting at lower levels.
We’ve seen similar V-shaped recoveries in previous cycles, often near local bottoms when selling pressure becomes exhausted. However, these moves can also turn out to be temporary relief rallies if broader market conditions remain weak.

Do you think this move represents a capitulation event, or just another relief rally before continuation lower?

If you've been here on this market for long years then these kind of movements arent something that you would that getting used to but if you are just that new into this market then you would definitely freak out with these movements. Instead on making yourself that gettiing stressed out with the current market movement, it would be better that oyu should be considering on having the buybacks on which this is the most important thing that you would be needing up to do. If you do know on how to play with these volatility then you would be having that easy profits but of course due to unpredictability and randomness of this market then it wouldnt be that as easy as we do know but of course once you do have that exprience and knowledge then you do have at least the idea on what you should gonna do instead of freaking out just because you've seen the market is dumping.

You should be wise on how you would be finding yourself that making up positions basing up into your analysis. Even though its not that precise but at least you've been doing something on which you know that you can be able to benefit out once the market would be making out recovery.