Bitcoin News Today: Bitcoin's Big Sell-Off Unveils a Market in Cautionary Mode

Bitcoin fell below $110,000 in early trading on Monday, marking its lowest level in over six weeks amid ongoing uncertainty surrounding the U.S. Federal Reserve’s monetary policy outlook. The decline came after a massive $11 billion sale by a dormant whale account, which shifted its Bitcoin holdings into Ether (ETH) spot and futures on the decentralized exchange Hyperliquid. This move, along with broader on-chain data, has raised questions about the sustainability of the recent Bitcoin rally and whether a deeper correction is on the horizon.

Despite the drop, demand for Bitcoin futures surged to an all-time high in open interest, reaching 762,700 BTC, an increase of 13% from two weeks prior. This surge in leveraged positions highlights the continued engagement of traders, even as the price has fallen roughly 10% from its all-time high set on August 14. The futures premium, which measures the annualized cost of holding futures contracts, remained at a neutral 8%, slightly up from 6% the previous week. Notably, the premium has not stayed above the 10% neutral level for more than six months, indicating a cautious market sentiment despite the rising open interest.

The bearish sentiment is further reflected in the options market, where put options have maintained a 10% premium over calls, a clear sign of investor fear. This imbalance is not unusual after a sharp two-day drop of $6,050, but it suggests that many market participants are hedging against further downside. The recent $284 million in liquidations of long positions also points to increased volatility and the potential for further price instability if the trend continues. The depth of liquidity on weekends, as shown by the rapid execution of large sell orders, has also raised some concerns about market structure and transparency.

On-chain data shows that all Bitcoin wallet cohorts have entered a distribution phase, led by mid-sized wallets holding between 10–100 BTC. The synchronized selling pressure across wallet sizes has weakened price stability and increased the likelihood of a break below the $105,000 support level. A breakdown below this level could expose further downside, with the next major support zone expected around $92,000–$89,000. Realized price data further underscores this risk, revealing that short-term holders are concentrated near recent highs, while longer-term holders are anchored closer to $90,000. This divergence suggests a potential capitulation risk if the price continues to fall.

The ongoing pullback also aligns with historical Bitcoin seasonality, as the market tends to weaken between August and September. This period often coincides with the “ghost month,” a traditional Asian period of reduced economic activity that has historically led to an average decline of 21.7% in Bitcoin prices. Additionally, recent comments from analysts have pointed to structural risks, such as the lack of a new all-time high in the BTC/EUR pair and signs of ETF-driven enthusiasm waning. These factors, combined with the current uncertainty surrounding the Fed’s next moves, suggest that Bitcoin may face a prolonged period of consolidation or even a deeper correction in the coming weeks.

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

[2] Bitcoin holders 'distribute' as $105K becomes BTC's last ... (https://cointelegraph.com/news/bitcoin-holders-distribute-as-dollar105k-becomes-btc-s-last-stronghold)