Bitcoin News Today: Bitcoin Drops 5.7% as Leveraged Position Liquidations and Geopolitical Tensions Spur Volatility

Generated by AI AgentCoin World
Saturday, Jul 26, 2025 12:07 am ET2min read
Aime RobotAime Summary

- Bitcoin dropped 5.7% on July 26, 2025, due to leveraged long liquidations and geopolitical tensions, falling from $122,000 to $115,000 in 24 hours with $144.8M in liquidations.

- Middle East tensions and Trump-era trade policies increased uncertainty, impacting traditional and crypto markets, with Bitcoin initially rising on a Vietnam deal before reversing.

- Derivatives markets showed negative Bitcoin funding rates and bearish options skews, while analysts warned of ongoing volatility from evolving geopolitical risks and regulatory developments like the proposed GENIUS and CLARITY Acts.

- Crypto-traditional asset linkages intensified as U.S. equities mirrored Bitcoin’s volatility, with the Fed’s dovish stance offering limited relief despite institutional advancements like SOL futures and USDC integration.

- Historical data suggests such drawdowns are common during bull cycles, with analysts advising caution on leverage and monitoring key support levels like $111,000–$112,000 amid lingering uncertainty.

Bitcoin’s price experienced a notable decline on July 26, 2025, as liquidations of leveraged long positions and geopolitical tensions amplified market volatility. The cryptocurrency fell from a recent high of $122,000 to $115,000 within a 24-hour period, driven by heightened selling pressure and a surge in trading volume. According to CoinGlass data, $144.8 million in liquidations were recorded during the same period, with $128.77 million attributed to long positions. This correction broke below the $116,000 support level, a threshold often observed during bull cycles as a potential catalyst for further drawdowns [1]. Analysts from COINOTAG noted that such unwinding of leveraged positions could lead to increased short-term volatility, though they emphasized that historical patterns suggest recovery potential amid bearish episodes [2].

The dip coincided with escalating geopolitical strains, particularly in the Middle East and amid U.S. trade policy shifts under President Donald Trump’s administration. Aggressive tariff announcements and retaliatory measures against key trading partners created macroeconomic uncertainties, dampening risk appetite in both traditional and crypto markets. For instance, a trade deal with Vietnam in mid-July initially spurred Bitcoin’s price above $110,000, but subsequent policy reversals reintroduced market jitters [3]. Derivatives markets reflected this sentiment, with negative

Bitcoin
funding rates and a shift in options skews toward out-of-the-money (OTM) puts.
Ethereum
options displayed a less pronounced bearish tilt, though long-term put-call skews remained positive, underscoring lingering uncertainty [4].

The interconnectedness between crypto and traditional asset classes was further highlighted during the period. U.S. equities, including the S&P 500 and Nasdaq-100, mirrored Bitcoin’s volatility, influenced by Trump-era trade policies and inflation concerns. The Federal Reserve’s dovish stance, including a pause on quantitative tightening and revised GDP projections, provided limited relief to markets. Institutional developments, such as CME Group’s launch of SOL futures and ICE’s exploration of USDC integration, signaled growing adoption but failed to counter immediate macro pressures [5].

Looking ahead, analysts warned of elevated volatility as geopolitical risks remain fluid and U.S. trade policies continue to evolve. Bitcoin’s sensitivity to macroeconomic events has intensified with its growing institutional traction, making it susceptible to external shocks. Regulatory developments, such as the proposed GENIUS Act and CLARITY Act, could further shape near-term trajectories. Derivatives metrics currently favor downside protection, with inverted volatility term structures and short-dated options skewed toward puts for both Bitcoin and Ethereum [6].

While the recent correction has raised concerns, historical data suggests that such drawdowns are common during bull runs and do not necessarily indicate a long-term bearish trend. Investors are advised to monitor key support levels, such as the $111,000–$112,000 range, and remain cautious about leveraging in volatile conditions. Analysts recommend staying informed through expert analysis and tracking on-chain metrics to navigate potential fluctuations [7].

---

Source:

[1] [Bitcoin’s Price Dip Amid Liquidations and Geopolitical Tensions](https://en.coinotag.com/bitcoin-price-dips-amid-liquidations-and-geopolitical-tensions-potential-for-future-volatility-2/)

[2] [Block Scholes x Bybit Crypto Derivatives July 25](https://example.com)

[3] [Block Scholes x Bybit Crypto Derivatives July 16](https://example.com)

[4] [Block Scholes x Bybit Crypto Derivatives June 19](https://example.com)

[5] [Block Scholes x Bybit Crypto Derivatives March 5th 2025](https://example.com)

[6] [Block Scholes x Bybit Ethereum’s Pectra Upgrade and the Market’s Cautious Reaction](https://example.com)

[7] [Block Scholes x Bybit Crypto Derivatives June 27](https://example.com)