Bitcoin Crashes Below $113K: Is This the Final Bottom?

Bitcoin Price Plummets Amid Market Uncertainty

Bitcoin experienced a significant crash, falling below $113,000 for the first time in over two weeks. This dramatic decline surprised traders and resulted in $113 million worth of liquidated leveraged long positions. The cryptocurrency's sharp drop followed its all-time high of $124,176 reached on Thursday, raising concerns about the continuation of the current bull market.

SEC Investigation Triggers Market Fear

World Liberty Financial Under Scrutiny

The Bitcoin price correction accelerated following reports of a Securities and Exchange Commission investigation into Alt5 Sigma. The company recently partnered with President Donald Trump's World Liberty Financial in a substantial $1.5 billion deal.

World Liberty Financial, which lists President Trump as "co-founder emeritus," successfully raised approximately $550 million through two public token sales. The platform markets itself as a decentralized finance and stablecoin solution.

Financial Stakes and Board Appointments

President Trump previously disclosed earning $57.4 million from his stake in World Liberty Financial. Additionally, Eric Trump is scheduled to join Alt5 Sigma's board, further connecting the Trump family to the cryptocurrency venture.

Corporate AI Disappointments Impact Market Sentiment

Cryptocurrency investors reacted negatively to a 1.5% drop in the Nasdaq 100. This decline followed MIT research revealing that 95% of companies failed to achieve rapid revenue growth from artificial intelligence pilot programs. The study, based on 150 corporate interviews and 300 public AI deployments, highlighted widespread AI implementation challenges.

US Trade Policies Create Economic Pressure

Import Tariffs Strain Market Confidence

New US import duties of 50% on 407 additional aluminum and steel-containing products contributed to market uncertainty. These tariffs affect everyday items including car parts, plastics, and specialty chemicals, prompting economists to warn about potential supply chain disruptions and increased consumer prices.

Gold Forecast Reflects Economic Concerns

UBS investment bank raised their gold price forecast to $3,700 by September 2026, signaling growing economic uncertainty. UBS strategists anticipate gold price rallies driven by below-trend economic growth, Federal Reserve policy easing, and a weakening dollar.

Bitcoin Options Market Signals Extreme Fear

Options Skew Indicates Heightened Caution

The Bitcoin options market demonstrated extreme bearish sentiment as demand for downside protection surged. The Bitcoin 30-day options delta skew reached 12%, marking its highest level in over four months.

Under normal market conditions, this indicator typically fluctuates between -6% and +6%, reflecting balanced pricing for call and put options. Levels exceeding 10% signal extreme fear but are rarely sustained for extended periods.

Historical Patterns Suggest Potential Recovery

A similar spike to 13% delta skew occurred on April 7, when Bitcoin dropped below $74,500 for the first time in five months. Investors who embraced the risk during that period experienced 40% gains over the following month as Bitcoin rallied to $104,150 by May 8.

Technical Analysis and Market Outlook

Bull Market Continuation Remains Possible

Current market evidence does not definitively indicate the end of Bitcoin's bull run. Historical analysis suggests that trader fear often exceeds rational market expectations, creating potential buying opportunities for contrarian investors.

Potential Stock Market Outflows Could Benefit Bitcoin

The cryptocurrency market might benefit from potential outflows in traditional stock markets. This dynamic suggests that current market turbulence does not necessarily invalidate Bitcoin's longer-term bullish trend.

Key Market Factors to Monitor

Economic Indicators Affecting Bitcoin

• Federal Reserve monetary policy decisions

• US dollar strength and weakness

• Traditional market performance and correlation

• Regulatory developments and enforcement actions

Technical Support Levels

The $112,000 level represents a critical support zone for Bitcoin. Market participants closely monitor this level as a potential final bottom before the next significant price movement.

Risk Management Considerations

Volatility and Market Timing

Bitcoin's recent price action demonstrates the cryptocurrency's inherent volatility and the challenges of market timing. Investors should consider risk management strategies when navigating uncertain market conditions.

Correlation with Traditional Assets

The cryptocurrency's correlation with traditional risk assets like the Nasdaq 100 highlights the interconnected nature of modern financial markets during periods of economic uncertainty.

Conclusion

Bitcoin's crash below $113,000 reflects multiple converging factors including regulatory investigations, corporate AI disappointments, and trade policy concerns. While the options market signals extreme fear, historical patterns suggest potential for significant rebounds. The current market turbulence presents both risks and opportunities for cryptocurrency investors navigating an increasingly complex macroeconomic environment.

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