Bitcoin experienced a sharp 13.7% correction on Friday, dropping to $105,000 in less than eight hours, which resulted in over $5 billion in futures liquidations and underscored ongoing market volatility despite the maturity of the ETF market.

Following the drop, Bitcoin briefly fell to $105,000 before rebounding above $114,000, marking a rare and volatile swing in its recent trading history.

The market structure has evolved with increased trading volumes on decentralized exchanges, but traders still face issues like auto-deleveraging, margin calculation errors, and forced liquidations of large bullish positions, especially in less liquid markets.

The recent crash was driven by factors such as low liquidity, rumors of insolvency, and the US market closure due to a holiday, which may have worsened the decline and delayed recovery.

Technical indicators like the RSI dropping to mid-40s and the MACD turning negative suggest a temporary cooldown and fading bullish momentum.

The crash led to over $3.32 billion in liquidations within an hour and more than $5 billion in total liquidations over 24 hours, reflecting high leverage and panic in the market.

The quick rebound was likely driven by algorithmic buy orders and strong spot demand near the $105,000–$107,000 support zone, with institutional buying fueling the recovery.

Bitcoin derivatives markets remain cautious amid low liquidity and uncertainty, with perpetual futures trading about 5% below spot prices, indicating a potential delay in market stabilization as traders assess support levels.

Experts warn that the market remains fragile, emphasizing the importance of staying above $110,000 to prevent further selling, with a drop below $100,000 risking additional liquidations.

Bitcoin's market capitalization has fallen to approximately $2.1 trillion, with trading volumes spiking above $99 billion amid panic-driven orders.

Despite recent institutional inflows and record highs, Bitcoin's price correction highlights persistent volatility in the crypto market.

Historical data shows that intraday corrections of similar or greater magnitude have occurred multiple times, including during the COVID crash of March 2020 and the FTX collapse in November 2022, indicating such volatility is part of Bitcoin's nature.