Bitcoin News Today: Bitcoin Dips Below $114,000 as Trader Confidence Wavers

Bitcoin's recent price dip has unsettled trader confidence, with the cryptocurrency dropping below $114,000 on July 31 amid $200 million in liquidations of leveraged long positions. This decline, following three consecutive weeks of failing to hold above $120,000, has prompted concern over whether the anticipated 2025 bull run is at risk. While the drop has not triggered a full-blown bearish shift, it has introduced a more cautious tone across the derivatives and options markets. Bitcoin’s 2-month futures premium currently sits at 6%, the lowest in four weeks, indicating weaker demand for leveraged bullish bets despite strong institutional interest [1].

The correlation between Bitcoin and the S&P 500 has also increased, with the two assets now moving in tandem over 70% of the time in recent weeks. This marks a departure from earlier divergence and suggests Bitcoin is behaving more like a high-risk tech stock rather than an independent "digital gold." The growing overlap with traditional equities highlights how macroeconomic forces—such as U.S. trade tensions and shifting monetary policy—continue to influence Bitcoin’s price action [2].

Market sentiment is further reflected in the options market. The 5% put-call skew at Deribit, currently on the edge between neutral and bearish, signals reduced confidence in the $114,000 support level. On July 18, the skew was still in bullish territory, but it has since shifted, indicating traders are paying a higher premium for downside protection. This change aligns with the broader net outflows from spot Bitcoin ETFs totaling $115 million on July 31, ending a five-day inflow streak [3].

Despite these headwinds, some bullish signals remain. MicroStrategy’s $4.2 billion stock offering aims to prevent large Bitcoin sales, which could help stabilize derivatives markets. Additionally, analysts note that historical patterns suggest Bitcoin tends to underperform in August, with the exception of post-halving years. Numerous market commentators still expect the bull run to extend into October [4].

The broader macroeconomic landscape also plays a role. The U.S. Treasury 1-year yield has reached a three-month high, as investors shift toward short-term safe assets amid weak job market data. This trend, combined with shifting regulatory stances—most notably the SEC's recent clarification that most cryptocurrencies are not securities—adds another layer of uncertainty for traders. While the SEC’s statement provides some clarity, it also introduces ambiguity for market participants still adjusting to evolving definitions and enforcement priorities [5].

In sum, while the current price environment has tested trader confidence and introduced short-term uncertainty, there is no definitive indication that the 2025 bull run is over. Institutional demand remains strong, and market participants continue to adapt to macroeconomic and regulatory shifts. The coming weeks will be critical in determining whether Bitcoin can regain its upward momentum or if further consolidation is needed before a new phase of the bull cycle begins.

Sources:

[1] title: Big Central Bank Rate Cuts Slow, Tariffs And Politics In ..., url: https://www.fastbull.com/news-detail/big-central-bank-rate-cuts-slow-tariffs-and-4337746_0

[2] title: Bitcoin price dip shakes trader confidence: Is the 2025 bull run in danger?, url: https://cointelegraph.com/news/bitcoin-btc-price-dip-shakes-trader-confidence-is-the-2025-bull-run-in-jeopardy

[5] title: r/Stocks Daily Discussion & Fundamentals Friday Aug 01, ..., url: https://www.reddit.com/r/stocks/comments/1merxze/rstocks_daily_discussion_fundamentals_friday_aug/