Bitcoin News Today: Bitcoin Dips Below $116K, Triggers $585M in Long Position Liquidations as 213K Traders Wiped Out

A wave of liquidations swept through leveraged long positions in the cryptocurrency market as Bitcoin dropped below $116,000 on Friday, triggering over $585 million in losses for bullish traders. The price of BTC fell 2.63% to $115,356, marking its first dip below the $116,000 threshold since reaching a record high of $123,100 on July 14. Ether (ETH) and Dogecoin (DOGE) also suffered, with ETH down 1.33% to $3,598 and DOGE losing 7% to $0.22, wiping out $26 million in long positions. Across the market, 213,729 traders were liquidated within 24 hours, as total losses hit $731.93 million, according to CoinGlass and Nansen data [2].

The sharp correction exposed vulnerabilities in leveraged positions, with short sellers now controlling 53.1% of the market, and the long/short ratio at 0.88, heightening the risk of a short squeeze if buyers regain control [1]. Technical indicators showed mixed signals: the daily RSI near 65 suggested underlying strength, while the 4-hour RSI at 51 indicated waning momentum. The 50-day EMA at $110,589 emerged as a critical support level, with a breakdown likely to trigger further stop-loss selling [1].

Institutional activity contrasted with retreating retail sentiment. While ETFs saw a $131.35 million outflow in early July, cumulative inflows of $6.6 billion in late July reflected sustained buying by firms such as MicroStrategy and Volcon [1]. Retail participation, however, weakened, with weighted sentiment falling below -1.03 and Social Dominance dropping to 27%, levels last seen in late 2024. On-chain data revealed a net outflow of 11.7K BTC from exchanges, suggesting whale accumulation, but derivatives markets remained fragile [1].

The retreat left room for altcoins to surge, with Ethereum leading the speculative charge. Altcoin market capitalization swelled by $216 billion in two weeks, driven by Ethereum’s open interest dominance of 38%—the highest since April 2023—and Solana’s $18 billion rise in open interest. However, altcoin open interest has exceeded the +2 standard deviation leverage threshold for 12 consecutive days, signaling overbought conditions [1].

Investors face a balancing act as the market consolidates. The Altcoin Season Index near 50 indicated early-stage capital rotation but highlighted susceptibility to sharp corrections. Post-July 8 reallocation, triggered by Bitcoin’s brief $123K peak, shifted focus to Ethereum and Solana, leveraging their technical advancements. Yet volatility persisted, with Solana’s funding rates fluctuating wildly, reflecting unstable conviction [1].

The Crypto Fear & Greed Index, however, remained bullish, posting a “Greed” score of 70 [2]. This disparity between technical caution and sentiment optimism underscores the market’s indecisiveness. For investors, disciplined risk management—diversification, dollar-cost averaging, and stablecoin hedging—emerged as key strategies. The next price move, whether a breakout above $120,250 or a retest of $116,000, will shape the trajectory of altcoins and broader risk dynamics [1].

Source: [1] [Bitcoin's $116K–$120K Consolidation and the Implications] [https://www.ainvest.com/news/bitcoin-116k-120k-consolidation-implications-altcoins-2507/] [2] [Bloodbath for crypto longs as Bitcoin tumbles below $116K] [https://coinmarketcap.com/community/articles/68830aaeb0543364aa5f6426/]