Bitcoin News Today: Bitcoin's Bullish Reversal Hinges on Liquidation's Hidden Catalyst

Bitcoin has confirmed a potential inverse head and shoulders pattern near $112,511, signaling a possible bullish reversal in the cryptocurrency market. This technical formation is a classic chart pattern used in trading to identify potential trend changes. The pattern includes a lower "head" between two higher "shoulders" and gains confirmation when the price breaks and retests the neckline. In this case, the breakout above the $113,000 neckline has been supported by increased volume, with a confirmed retest observed in September 2025 [2].

Despite the bullish signal, liquidation dominance has surged to 18.1%, reflecting significant closures of long positions and ongoing bearish pressure in the market [2]. This elevated liquidation rate parallels past market corrections and suggests heightened volatility as forced selling pressures leveraged long positions. Analysts caution traders to remain cautious amid the positive technical signals, as volatility often accompanies liquidation waves. Liquidation dominance at 18.1% means that forced selling has trimmed leveraged long exposure and increased intraday volatility [2].

The inverse head and shoulders pattern’s formation is supported by key price levels identified by technical analysts. The left shoulder was formed at approximately $105,000 in December 2024, while the head reached a low of $75,100 in March 2025. The right shoulder was established between $101,000 and $105,000 in June–July 2025. The neckline breakout occurred at $113,000 in August 2025, with the current price near $112,511, suggesting a confirmed retest [2].

Analysts such as Merlijn The Trader and Axel Adler Jr. have highlighted the importance of the pattern’s confirmation. Merlijn noted a neckline retest following the breakout, which is a classic confirmation signal. The increased volume during the August breakout, along with September’s continuation phase, reinforced the move. Axel Adler Jr. emphasized that deleveraging has historically preceded both deep corrections and eventual bullish cycles. While deleveraging increases short-term liquidity-driven declines, it can also clear imbalances and enable stronger long-term rallies when on-chain and macro fundamentals align [2].

However, Bitcoin also faces the risk of a double-top formation, a bearish pattern where the price fails to break through a resistance level twice before declining. Prominent trader Peter Brandt has warned of a potential double-top, with Bitcoin needing to reclaim the critical $117,570 level to avoid such a bearish scenario. Brandt estimates a 30% chance that Bitcoin reached its peak in August, as it is currently down nearly 10% from its local peak of $124,128 [8]. A confirmed double-top could signal a reversal to the downside, further complicating the bullish narrative.

The market remains in a state of flux, with traders closely monitoring both technical indicators and macroeconomic developments. The potential for a new all-time high hinges on sustained price discovery above recent highs and a successful retest of the $113,000 neckline. Traders are advised to implement risk controls, including position sizing, stop management, and reduced leverage to mitigate the impacts of short-term volatility [2]. The current price consolidation between $112,000 and $124,000 reflects a period of consolidation after recent price swings, while technical patterns suggest the potential for another upward breakout.

Bitcoin’s recent movements, including the inverse head and shoulders pattern and the double-top warning, underscore the complexity of navigating the crypto market. Investors and traders must balance bullish technical signals with caution due to liquidation risks and macroeconomic uncertainties. The coming weeks will be critical in determining whether Bitcoin can maintain its upward trajectory or face another correction.

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[2] title2 (https://www.bitget.com/news/detail/12560604925915)