In the Sunday update of the latest Compass, we anticipated the move hours before the flash crash unfolded:
Bitcoin is currently retesting the $97.2K–$98.5K zone, which has served as both a short-term refuge and a resistance level. If this zone is lost, the next step would be to revisit $92K.
That’s exactly what happened. BTC corrected to $91.3K, rebounded strongly, and closed the CME gap at $102K—a move triggered by the weekend’s drop.
Now that Bitcoin is correcting again, what’s next? Are we setting up for consolidation, or is more volatility ahead? Let’s break it down.
Trade War Ended Before It Even Started, Right?
The agreements reached by the U.S. with its counterparts in Mexico and Canada brought relief to the markets, which quickly recovered their losses within hours—as if nothing had happened.
But something did happen. Officially, over $2 billion was liquidated from the crypto market. However, according to the CEO of Bybit—the second-largest exchange by market cap—the real figure could be much higher. He claims that liquidations over the last 72 hours might be between $8–10 billion, as the $2 billion figure only accounts for Bybit itself.
This raises an urgent debate about the role of exchanges in providing transparency regarding futures trading, leverage, and liquidations. If the Bybit CEO’s claims are accurate, then not only this flash crash—but also previous liquidation events, including collapses like Terra/Luna and FTX—could have been far more severe than initially estimated.
This leads to an important question for the sustainability and credibility of the crypto industry: Is the lack of transparency on liquidations intentional? Could exchanges be withholding crucial data about how they manage futures trading to protect their own interests?
Right now, transparency is a major issue in an industry built on blockchain values—one of which is precisely openness and verifiability.
Is the Correction Over?
Bitcoin’s drop to the $97.2K–$98.5K zone was a move we had anticipated as part of a bearish divergence on the daily timeframe. From there, BTC wicked down to $91.3K, marking an additional 6% correction.
From Sunday’s opening price of $101.5K to the $91.3K low, Bitcoin saw a 10% correction. But in perspective, look at the impact on Layer 1s:
ETH: -33%
XRP: -40%
SOL: -20%
Bitcoin did what was expected—it corrected within the anticipated range and reacted from there. But the reaction in altcoins is concerning.
A Structural Shift in Market Dynamics?
Bitcoin’s correction triggered an outsized impact on altcoins, even among top-tier Layer 1s.
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