Bitcoin Price Forecast - BTC-USD Slumps to $112,725 as $1.7B Liquidation Hits, Market Cap Shrinks to $2.24T

Bitcoin (BTC-USD) is trading at $112,725, down 2.5% on the session, after a rejection near $117,968 triggered one of 2025’s largest liquidation events. More than $1.7 billion in crypto positions were flushed in just 24 hours, with long traders losing $1.62 billion, making it the biggest wipeout of the year. The collapse erased nearly $110 billion in market cap, dragging Bitcoin’s valuation down to $2.24 trillion.

The scale of the drop exposed the fragility of recent gains. Bitcoin’s daily trading range between $111,986 and $115,776 shows that volatility is running hot, and the consolidation band at $112K–$113K has become the battlefield where bulls and bears are clashing.

Daily Chart Signals: Bearish Engulfing Candle From $117,968 Peak

On the daily timeframe, BTC produced a bearish engulfing candle after failing to hold above the critical $117K–$118K resistance zone. The rejection carried price sharply lower to $111,986, briefly slicing through the 100-day EMA at $111,882, before rebounding to current levels near $112,700.

The technical structure now presents two immediate scenarios:

• If Bitcoin reclaims and holds $113,500, it could stage a rally back toward $116,000–$117,500.

• If $112,000 breaks, price could accelerate lower toward $110,000 and potentially $107,200.

Momentum indicators lean bearish: the RSI at 44 has slipped below neutral, the MACD crossed negative, and shorter-term moving averages (10, 20, 30, 50) all hover above spot price, reinforcing downward pressure. The only supportive signals come from the 100-day and 200-day EMAs, which remain aligned for long-term bullish structure.

Short-Term Frames Show Liquidity Trap and Capitulation

On the 4-hour chart, BTC collapsed from $117,968 to $111,986, breaking its ascending parallel channel and invalidating the bullish trendline. Volume spiked at the lows, often a sign of capitulation. The $112K–$113.5K zone has now become a key pivot: a breakout above $113.5K could quickly lift price to $115K–$116K, while failure would expose liquidity pools around $107K.

On the 1-hour chart, Bitcoin trades in a narrow band between $112,500 and $113,000. A high-volume breakout above $113,300 could ignite short-term gains toward $114,500–$115,000, but traders are placing stops just under $112,000 to hedge against another breakdown.

Record Long Liquidations Reset Leverage

Data from Glassnode and CoinGlass confirms that the September 22 crash wiped $1.7 billion in positions, the largest liquidation cluster of 2025. Most of the pain landed on longs stacked in the $111K–$114K range, as the rejection at $117K was a textbook liquidity sweep.

While painful, such events often clear excessive leverage and allow new accumulation. Open interest collapsed by nearly $2 billion, and funding rates reset lower. If fresh buying emerges around $112K, it could mark the base for a more sustainable recovery.

Macro Environment: Fed Policy, Powell’s Speech, and Inflation Data

The selloff unfolded against a tense macro backdrop. The Federal Reserve’s 25bp rate cut last week initially fueled a push to $118K, but Chair Jerome Powell’s careful comments undermined hopes for a rapid easing cycle. Yields on the 10-year U.S. Treasury sit at 4.148%, keeping risk assets under pressure.

Markets are pricing in a 92% probability of another 25bp cut on October 29, but the outcome hinges on Friday’s PCE inflation index, the Fed’s preferred gauge. A soft print could spark a relief rally in BTC, while hotter inflation would reinforce resistance at $117K.

Adding intrigue are political rumors circulating about a potential U.S. Strategic Bitcoin Reserve (SBR) announcement. If the Trump administration signals intent to adopt BTC as a reserve asset, institutional demand could spike overnight. Galaxy Digital’s Alex Thorn argues the market is underestimating this risk.