Bitcoin has started the week on shaky ground, trading at around $109,000 as of early Tuesday morning, amid heightened volatility and a sharp wave of liquidations that have swept through the cryptocurrency market. The flagship digital asset has experienced dramatic fluctuations, reflecting the stress placed on over-leveraged traders and growing tension in broader financial markets.

Price Swings Underscore Bitcoin’s Struggle for Stability

Data from CoinMarketCap reveals that Bitcoin’s price has bounced between $109,108.40 and $110,376.88 in the past 24 hours. Although the asset briefly pushed past the $110,000 level, profit-taking activities by short-term traders forced it back below the $109,000 mark.

As of 7:12 AM on May 27, Bitcoin traded at $109,108.40, representing a 0.50% drop within a 24-hour window. Despite this dip, Bitcoin still boasts the largest market capitalization in the digital asset space at $2.16 trillion, with daily trading volume reaching a robust $49.26 billion.

Altcoins Deliver Mixed Results as Ethereum Edges Up

Ethereum, the second-largest cryptocurrency by market value, has shown modest strength. The asset has been moving within a range of $2,450 to $2,750, with resistance forming near the $2,600 level and a support base around $2,500.

At the time of reporting, Ethereum traded at $2,605.64 — a 1.32% gain — supported by a 24-hour trading volume of $13.56 billion. However, despite positive price movement, analysts note that Ethereum has yet to display a convincing breakout from its current trading range.

Meanwhile, other altcoins are displaying uneven performance. Binance Coin (BNB) posted a small increase of 0.58%, whereas Solana (SOL) declined by 1.96%, and Ripple (XRP) registered a loss of 1.68%. The popular stablecoin Tether (USDT) remained largely pegged to the U.S. dollar at $1, logging a minimal 0.01% dip.

Among trending tokens, several projects have attracted notable investor interest. These include Ethereum (ETH), Polyhedra Network (ZKJ), Merlin Chain (MERL), BUILDon (B), and Huma Finance (HUMA), according to CoinMarketCap.

Mass Liquidations Reshape Market as Long-Term Holders Accumulate

The most significant driver behind Bitcoin’s recent decline appears to be the cascading liquidations that have rattled the market. Experts attribute the sell-off to excessive leverage among speculative traders, many of whom faced forced sales as the market turned against them.

Amr Taha, a leading analyst at CryptoQuant, noted that this volatility sparked a renewed accumulation effort from long-term Bitcoin holders. He explained that two key liquidation events over the past few days resulted in a combined loss of $185 million in long positions. The first wave occurred when Bitcoin dropped below $111,000, triggering $97 million in liquidations. A second, sharper decline beneath the $109,000 level wiped out an additional $88 million.

These rapid sell-offs, driven by margin calls, created panic among short-term traders. Yet, long-term holders capitalized on the opportunity, ramping up their Bitcoin acquisitions at discounted prices.

Taha also pointed out that this renewed accumulation led Bitcoin’s long-term holder realized capitalization to surpass $28 billion — a level last seen in April. This metric offers a deeper insight into investor sentiment by assessing the value of Bitcoin based on the price at which coins last moved, rather than the current market rate. The increase suggests that more coins are being transferred at higher valuations, likely due to confident buying among seasoned investors.

According to Taha, these strategic purchases during periods of high volatility highlight the growing conviction among long-term holders. Rather than retreating during market dips, they view such downturns as buying opportunities that could pay off in the medium to long term.

Bitcoin’s Recent Rally and Geopolitical Drivers

It is important to recall that Bitcoin achieved a historic milestone just last week, climbing to a new all-time high above $109,760.08 on Wednesday. The crypto market’s upbeat sentiment was largely fueled by global economic developments, including reduced tensions between the United States and China and the surprise credit rating downgrade of U.S. sovereign debt by Moody’s.

These factors combined to create a more favorable environment for risk-on assets, allowing Bitcoin to surpass its previous high set in January. As investor optimism returned, many piled into digital assets, driving Bitcoin above the $110,000 level briefly before the recent profit-taking wave set in.

What Lies Ahead for Bitcoin and the Market

Despite the current turbulence, many analysts remain optimistic about Bitcoin’s medium-term prospects. They argue that periodic corrections like the current one are healthy for sustaining longer-term rallies. Additionally, the shift in holdings from short-term speculators to long-term investors may strengthen Bitcoin’s foundation and reduce future volatility.

However, risks still linger. The broader market continues to grapple with macroeconomic uncertainties, including the potential for more rate adjustments by central banks, trade policy developments, and geopolitical instability.

Moreover, the rising cost of leverage and stricter oversight in key jurisdictions may further dampen enthusiasm among day traders and speculative investors, leading to more shakeouts in the coming weeks.

For now, the eyes of the crypto world remain fixed on Bitcoin’s next move — whether it will regain the $110,000 mark and push higher, or sink further as volatility persists.