Correction or Pause? Bitcoin Steadies Above $100K After Overheating

Amid a notably overheated market, Bitcoin is pulling back toward the $100,000 mark. Following a recent optimistic rally to $105,000, investors partially took profits, reduced leverage, and reacted to the risks of potential cascading long liquidations. 

Despite this growing pressure, retail activity remains elevated. Institutional interest also continues to provide support, driven by record ETF inflows and the historic inclusion of Coinbase in the S&P 500 index.

• The key support level around $100,000 remains intact for now.
• The total crypto market cap has declined by $61 billion in the past 24 hours.
• The technical outlook leaves room for a short-term bounce upward. 
• Market indicators don't yet signal a full reversal: RSI has moved out of overbought territory but remains within bullish levels.
• Altcoins face increased volatility, with Pi Network’s token the biggest loser of the day, down 8%.

Collectively, these factors suggest the overall uptrend is still unbroken.

Related: What Is the RSI Indicator?

What’s Really Driving the Market?

Bitcoin is facing localized pressure fueled by a combination of technical and behavioral factors. 

• Cautious sentiment: Analysts warn that a move toward $102,700 could trigger a cascade of long liquidations, with estimates placing the total at around $1.45 billion.
• Fading risk appetite: Data from CryptoQuant shows a noticeable drop in the Estimated Leverage Ratio, signaling potential volatility ahead.

• Market overheating: The SOPR indicator shows that some investors are exiting positions at a loss. Another signal that the market is overheated and starting to shake out short-term participants and “Bitcoin tourists.”
• Short-term uncertainty: Institutional players have temporarily scaled back activity, while retail traders remain highly engaged. This behavioral gap is creating a disconnect between market segments.

Bitcoin Technical Analysis: 

• Support: $100,000, $98,000, and $95,700. A break below these zones could intensify selling pressure. 
• Resistance: Around $104,000. A clear breakout above this level could open the door to new local highs.

Fundamentals Intact: Short-Term Dip, Long-Term Momentum

Despite the current pullback, Bitcoin’s fundamental outlook remains strong. 

The key event this week is Coinbase’s addition to the S&P 500. This is the first time a crypto company joins the index of America’s largest publicly traded firms. The move signals deeper institutional recognition of the industry and, by extension, strengthens Bitcoin’s position as its leading asset.

Important changes are also unfolding on the regulatory front. New SEC Chair Paul Atkins signaled a departure from the agency’s previous “regulation-by-enforcement” stance, announcing plans to establish clear rules for crypto assets. This shift is easing regulatory pressure and creating a more predictable environment.

Related: Who Are You, Mr. Paul Atkins?

Institutional appetite remains strong: crypto ETFs saw $882 million in inflows over the past week, bringing the year-to-date total to $6.7 billion. 

These levels are nearing the records set in early 2024. ETF momentum and continued capital inflows are key drivers that could reinforce Bitcoin’s position, especially as the macroeconomic outlook stabilizes.

Correction or Just Cooling Off?

The current pullback appears more like a cooldown following a sharp rally than the start of a bearish reversal. Institutional investors haven’t exited the market; they’re simply recalibrating risk and adapting to shifting conditions.

As long as Bitcoin holds the $100,000 level, the fundamental structure remains solid, and short-term pressure doesn’t invalidate the broader bullish outlook.