Bitcoin News Today: $585M in Long Positions Liquidated as Bitcoin Falls Below $116K, Affecting 213K Traders

Over $585 million in long positions were liquidated across the crypto market on July 20, 2025, as Bitcoin (BTC) fell below $116,000, marking a sharp reversal from its all-time high of $123,100 reached just a month earlier. Ether (ETH) and Dogecoin (DOGE) also faced significant losses, with $104.76 million and $26 million in long liquidations respectively, according to data from CoinGlass and Nansen [1]. The selloff triggered the liquidation of 213,729 traders, exposing fragility in leveraged positions amid recent optimism about sustained bullish momentum [1].

Bitcoin’s price action highlighted a critical juncture in market sentiment. Despite the decline, the Crypto Fear & Greed Index still recorded a “Greed” score of 70, suggesting underlying confidence in further gains [1]. However, technical indicators painted a mixed picture. The 4-hour RSI at 51 and daily RSI near 65 indicated waning short-term momentum and residual long-term resilience, while the MACD’s neutral stance underscored indecision among traders [1]. A breakdown below $116,000 could test the 50-day EMA at $110,589, whereas a rebound above $120,250 might reignite the uptrend [1].

On-chain activity revealed diverging investor behaviors. A net outflow of 11.7K BTC from exchanges suggested accumulation by large holders, reducing immediate supply pressure [1]. Yet derivatives markets showed a bearish tilt, with short positions accounting for 53.1% of open interest and the long/short ratio at 0.88, creating conditions for a potential short squeeze should Bitcoin stabilize [1]. Institutional activity partially offset retail outflows: Bitcoin ETFs saw $131.35 million withdrawn in early July but recorded $6.6 billion in cumulative inflows by late July, reflecting persistent demand from corporate buyers like MicroStrategy [1].

The broader crypto market experienced a $216 billion surge in altcoin market capitalization over two weeks, the largest such increase on record. Ethereum emerged as a focal point, with open interest dominance reaching 38%—its highest since April 2023—and perpetual trading volumes briefly surpassing Bitcoin’s for the first time since 2022 [1]. Smaller-cap tokens, including Solana (SOL), XRP, and UNI, also attracted capital, though their combined open interest swelled by $18 billion in July alone. This rapid rotation, however, has pushed altcoin open interest beyond +2 standard deviation leverage thresholds for 12 consecutive days, heightening vulnerability to sharp corrections [1].

Retail sentiment, meanwhile, deteriorated sharply. Weighted sentiment fell below -1.03, and Social Dominance dropped to 27%, levels last observed in late 2024. Declining new UTXO creation signaled weak grassroots buying, shifting the onus to macroeconomic factors for Bitcoin’s next directional move [1]. For individual investors, the environment demands disciplined risk management. Diversification, dollar-cost averaging, and stop-loss strategies are recommended as Bitcoin consolidates within the $116K–$120K range. A retest of $120,000 could catalyze further altcoin gains, while a breakdown below $116,000 risks triggering a cascading sell-off, particularly among leveraged positions [1].

Source: [1] [Bitcoin’s $116K–$120K Consolidation and the Implications] [https://www.ainvest.com/news/bitcoin-116k-120k-consolidation-implications-altcoins-2507/]