The past few days have been a rollercoaster for crypto holders. Bitcoin price hit a record high of just over $126,000 earlier this week, only to fall sharply to around $121,000. Ethereum, Binance coin, and several other tokens have also taken a hit, sparking questions across the market. After days of optimism, what exactly is behind this sudden pullback?
Whenever Bitcoin price touches a new all-time high, a correction usually follows, and this time seems no different. BTC surged past $126,000 only two days ago, marking one of its strongest rallies in years. Yet since then, it has been sliding downward, shedding nearly 4% within 24 hours.
Some traders could see this as a healthy reset after a rapid climb. Others think it’s the result of excessive leverage in the futures market. Data from Coinglass showed that more than $690 million worth of long positions were liquidated in the past day. That scale of liquidation creates a cascading effect, forcing more selling and deeper price declines.
This kind of movement often happens when the market becomes too euphoric. Traders open highly leveraged positions expecting BTC to rise forever, and once prices dip slightly, those positions get liquidated automatically. The forced selling drives prices even lower, amplifying the fall.
Ethereum and Binance Coin Also Face Selling Pressure
Ethereum and Binance coin have not been spared from this pullback. ETH price has fallen by around 5% in the past 24 hours, while BNB has slipped after recently reaching its own record near $1,350.
Part of the reason lies in simple market psychology. When Bitcoin falls, investors usually sell other assets to cover losses or preserve profits. This correlation is especially strong during moments of panic.
Another possible factor is profit-taking by large holders. Whenever prices hit record levels, some early investors begin to sell portions of their holdings to lock in gains. This selling adds extra pressure, especially when combined with the liquidations happening in futures markets.
Despite the dip, analysts point out that both ETH and BNB remain far above their 2024 averages, suggesting that the overall trend is still bullish over the longer term.
Market Makers and the Role of Liquidations
Some experienced traders believe the recent dump is not purely organic. Market participants like Ash Crypto have argued that market makers and large entities sometimes deliberately trigger liquidations to profit from volatility.
This dump is solely engineered by market makers to liquidate the bullish longs opened by retail investors after Bitcoin reached a new all-time high.
— Ash Crypto (October 7, 2025)
In the past, perpetual trading was not so common, so prices would rise at a faster pace because cartels profited mainly during…
According to that view, when prices reach extreme highs, these major players can sell large amounts of BTC or ETH, pushing prices down just enough to liquidate leveraged longs. Once the over-leveraged traders are wiped out, they can buy back at lower levels, effectively profiting on both sides.
While these claims are difficult to verify, the pattern is familiar. Similar events happened during previous bull cycles when sudden drops wiped out billions of dollars in leveraged positions. Many see it as a reminder of how dangerous margin trading can be during periods of high volatility.
Market sentiment still leans optimistic for Q4, as many expect altcoins to perform strongly once Bitcoin stabilizes. The dip may feel painful now, but corrections like this have historically been part of the cycle that refreshes the market before another rally.