Bitcoin breaks below $116K, entering low-liquidity zone with uncertainty on bull trend.

Bitcoin breaks below $116K, entering low-liquidity zone with uncertainty on bull trend.

Bitcoin (BTC) has experienced a significant price drop, breaking below the $116,000 mark and entering a low-liquidity zone, according to recent market data. This development has sparked uncertainty about the continuation of the bullish trend that has characterized the cryptocurrency market in recent months.

The latest price movement comes as Bitcoin approached $116,000 following Monday's Wall Street open, with bulls targeting sell liquidity. However, the price faced strong resistance at this level, as indicated by the presence of significant liquidity walls, both above and below [1].

Exchange order-book liquidity data from CoinGlass showed that the price was pinned below a wall of asks centered on $115,800. Traders have noted that if Bitcoin can break above $115,850, it would confirm that the $112,000 area was likely the bottom [1]. However, the price has since declined, entering a low-liquidity zone that could exacerbate price volatility.

The market sentiment is further influenced by the ongoing uncertainty surrounding tariffs and the potential impact on institutional demand. US-listed spot Bitcoin ETFs have recorded an outflow of $333 million on Monday, marking a three-day streak of withdrawals [2]. This outflow suggests that institutional investors are adopting defensive positions, potentially indicating a bearish outlook.

Bitcoin futures open interest has also declined to its lowest levels since July 10, with the CME Group showing a cautious stance among traders [2]. The declining exposure from long directional participants has pushed futures premiums toward two-month lows, further signaling a reluctance to build long exposure in the market.

Analysts are divided on the potential path of Bitcoin's price. While some suggest that Bitcoin could aim for its key psychological level at $120,000 if it closes above $116,000 on a daily basis, others argue that the cryptocurrency could extend its decline to retest its 50-day Exponential Moving Average at $113,041 [2]. The Relative Strength Index (RSI) on the 4-hour chart reads 44, supporting the bearish thesis.

In conclusion, Bitcoin's recent price drop and entry into a low-liquidity zone have created uncertainty about the continuation of the bullish trend. The ongoing tariff uncertainty and institutional demand outflow add to the market's cautious stance. Investors and financial professionals should closely monitor the market's reaction to these developments.

References:
[1] https://cointelegraph.com/news/bitcoin-btc-price-eyes-116k-liquidity-sweep
[2] https://www.fxstreet.com/cryptocurrencies/news/bitcoin-price-forecast-btc-struggles-below-115-000-as-tariff-woes-continue-to-dent-sentiment-202508051015