Bitcoin News Today: Bitcoin's $110K Slide Sparks Debate: Correction or Deeper Crisis?

Bitcoin fell below $110,000 on Monday, marking a significant pullback driven by heightened bearish sentiment and U.S. economic developments that may influence the Federal Reserve's policy decisions in the coming months [1]. The drop came amid $284 million in liquidations of Bitcoin long positions, according to CoinGlass data, as traders grappled with the impact of an $11 billion sale by a dormant whale that shifted exposure to Ether [1]. Despite the price decline, demand for Bitcoin futures reached an all-time high, with open interest climbing to 762,700 BTC, reflecting sustained trader engagement in leveraged positions [1]. However, the market remains in a delicate balancing act, as the 8% annualized premium on Bitcoin futures—a neutral metric—has not surpassed the 10% threshold for months, underscoring cautious positioning [1].

On-chain data reveals broad distribution across BTC wallet cohorts, with mid-sized holders driving the recent pullback. A bearish weekly engulfing candle formed on Bitcoin’s chart, signaling vulnerability on the downside. The key support level at $105,000 is now under scrutiny, as mid-sized wallets continue to sell off amid broader market uncertainty [3]. The synchronized behavior across wallet sizes suggests uniform sell-side pressure, weakening price stability and raising concerns about a potential breakdown toward $100,000–$92,000 levels [3]. Additionally, the seasonal weakness typically observed in August and September, often exacerbated by Asia’s “ghost month” from August 23 to September 21, could further weigh on Bitcoin’s momentum [3].

Meanwhile, the Federal Reserve’s evolving policy stance is a central factor in shaping crypto market sentiment. At its July 29–30 meeting, the Fed maintained the target range for the federal funds rate at 4-1/4 to 4-1/2 percent, but acknowledged the shifting balance of risks and the potential for less restrictive monetary policy [4]. Fed Chair Jerome Powell emphasized that the economy remains resilient, but downside risks to employment and upside risks to inflation persist. The central bank is closely monitoring the effects of higher tariffs and the potential for inflation expectations to become unanchored [4]. These developments have led to renewed speculation about the timing and magnitude of potential rate cuts, with market-based measures indicating expectations of one to two 25 basis point cuts by year-end [4].

The upcoming release of key U.S. economic data—including the second-quarter GDP growth and July core PCE inflation—will be pivotal in shaping the Fed’s next moves and, by extension, Bitcoin’s near-term trajectory [5]. Traders are closely watching these metrics, as a slower-than-expected GDP growth or a larger-than-anticipated rise in inflation could delay or even reverse the Fed’s plans for rate cuts. This uncertainty has led to a mixed crypto market response, with Bitcoin retreating below $110,000 while Ethereum briefly hit an all-time high before retreating [5]. Analysts caution that any further weakness in Bitcoin’s price could trigger cascading liquidations if longs remain overleveraged, particularly given the current open interest levels and the potential for weekend liquidity constraints [1].

Market participants remain divided on the implications of the recent price action. Some view the pullback as a temporary correction within a broader bullish trend, contingent on renewed inflows into spot ETFs and improved macroeconomic conditions [1]. Others warn that the distribution patterns and technical indicators suggest a deeper correction is possible, particularly if Bitcoin fails to reclaim $105,000. The $13.8 billion monthly options expiry on Friday could serve as a catalyst for market direction, but the prevailing cautious sentiment—reflected in a 10% premium for Bitcoin put options—suggests that bearish bias remains dominant [1].

As the week progresses, attention will remain fixed on macroeconomic developments and geopolitical shifts, including the impact of President Donald Trump’s recent decision to fire Federal Reserve Governor Lisa Cook. Market analysts have expressed concerns that such actions could undermine confidence in the Fed’s independence, potentially increasing uncertainty in both traditional and crypto markets [6]. With Bitcoin now testing critical support levels and the U.S. economy navigating a complex policy landscape, the coming days will be crucial in determining whether the bearish momentum stabilizes or accelerates.

Source:

[1] title1 (https://cointelegraph.com/news/bitcoin-futures-demand-rises-even-as-btc-sells-off-what-gives)

[2] title2 (https://www.investors.com/news/ethereum-price-record-high-bitcoin-cryptocurrency-fed-speech)

[3] title3 (https://cointelegraph.com/news/bitcoin-holders-distribute-as-dollar105k-becomes-btc-s-last-stronghold)

[4] title4 (https://www.federalreserve.gov/monetarypolicy/fomcminutes20250730.htm)

[5] title7 (https://cryptopotato.com/3-things-that-could-impact-crypto-markets-in-week-ahead-3/)

[6] title8 (https://finance.yahoo.com/news/bitcoin-sinks-below-110-000-042641465.html)