Bitcoin suffered a significant correction in early European trading hours Tuesday, plunging from $70,000 to sub-$66,000 levels.

The world’s largest cryptocurrency has since rebounded. At the time of writing, the Bitcoin price is currently $66,736.53, representing a 4.4% decline over the past 24 hours and means it's now exactly where it was this time last week, according to data from CoinGecko.

The sudden downturn has sent ripples through the crypto market, with Ethereum, the second-largest cryptocurrency, also feeling the pressure. At the time of writing, the Ethereum price is currently sitting at $3,352.94, down 0.6% in the same period, according to CoinGecko data.

This abrupt correction has triggered a wave of liquidations in the Bitcoin market. Over the past 24 hours, total liquidations have reached a staggering $76.89 million. It was just this time yesterday that Bitcoin, which had briefly touched the $70,000 mark, took a wild swing towards $67,000 and took out $185 Million worth of futures contracts in the process.

Long positions bore the brunt of this sell-off, accounting for $69.71 million in liquidations, while short positions saw $7.18 million wiped out, according to CoinGlass data.

Market analysts attribute the correction to a number of factors, including the still-looming specter of Mt. Gox, a defunct cryptocurrency exchange. Repayments to Mt. Gox creditor are still ongoing and it's still possible that a portion of the users getting their BTC after going a decade without will decide to realize their gains. But so far, evidence shows that they're content to HODL.

Adding to market jitters, the U.S. government has made significant moves with its Bitcoin holdings.

The Department of Justice transferred 29,799.99011436 BTC (approximately $2.02 billion) from an address associated with seized Silk Road funds. This transfer has raised questions about the government's intentions for these assets.

Regardless of the reason why the Bitcoin price is lagging, BRN analyst Valentin Fournier calls the dip a "healthy correction."

"Technical indicators suggest ample room for further growth, with Bitcoin currently trading below overbought levels. Moreover, a confluence of bullish factors continues to support the cryptocurrency's upward trajectory," he wrote in a note shared with Decrypt. "Anticipated interest rate cuts, growing institutional adoption, the increasing interest of developed countries for holding BTC as a reserve asset and a strong US economy are all contributing to a favorable market environment."

Fournier added that this now sets the stage for a potential short squeeze.

"A sustained price increase could trigger a short squeeze, potentially injecting additional momentum into the market and propelling Bitcoin through the crucial $70,000 and $72,000 resistance levels," he wrote.

Edited by Stacy Elliott.