Bitcoin News Today: Bitcoin Falls 2.63% Below $116K Triggering $585M in Long Liquidations

Bitcoin’s recent slump below $116,000 triggered a wave of liquidations across the crypto market, wiping out over $585 million in long positions on Friday alone. The price of the leading cryptocurrency fell 2.63% to $115,356, according to CoinGlass data, while Ether (ETH) dropped 1.33% to $3,598, resulting in $104.76 million in losses. Dogecoin (DOGE) saw the largest losses among top 10 cryptocurrencies by market cap, tumbling 7% to $0.22 and erasing $26 million in long positions, per Nansen. Over the past 24 hours, total liquidations reached $731.93 million, liquidating 213,729 traders [1].

The sell-off marked a sharp reversal from Bitcoin’s July 14 all-time high of $123,100, catching many bullish investors off guard. Technical indicators suggest the market is in a critical consolidation phase between $116,000 and $120,000. A breakdown below $116,000 could push the price toward the 50-day EMA at $110,589, while a sustained close above $120,250 might reignite the uptrend. However, mixed signals persist: the 4-hour RSI at 51 indicates fading short-term momentum, while the daily RSI near 65 reflects lingering bullish strength. The MACD’s neutrality underscores the market’s indecision [1].

On-chain data reveals a complex landscape. A net outflow of 11.7K BTC from exchanges suggests institutional accumulation, yet derivatives markets show a bearish tilt, with short positions dominating at 53.1% and the long/short ratio at 0.88. This imbalance could trigger a short squeeze if Bitcoin stabilizes near $116,000. Meanwhile, retail participation has waned, with weighted sentiment dropping below -1.03 and Social Dominance falling to 27%, levels last seen in late 2024. Slowing new UTXO creation indicates a lack of FOMO-driven buying, shifting the focus to macroeconomic factors and institutional execution [1].

The altcoin market has absorbed some of the volatility, with the broader market cap surging $216 billion in two weeks—the largest such increase on record. Ethereum, in particular, has seen open interest dominance reach 38%, its highest since April 2023, while perpetual trading volumes surpassed Bitcoin’s for the first time since 2022. Solana, XRP, and smaller-cap tokens like UNI have also experienced $18 billion in open interest gains in July. However, altcoin open interest has exceeded the +2 standard deviation leverage threshold for 12 consecutive days, raising risks of sharp corrections [1].

Investors are advised to adopt a diversified approach amid the uncertainty. Institutional allocations to Ethereum and Solana, driven by technical progress and ecosystem growth, highlight potential opportunities, but liquidity risks remain. For individual traders, strategies such as dollar-cost averaging, stop-loss orders, and stablecoin hedges are critical to managing exposure to Bitcoin’s potential breakdown or altcoin liquidity shocks. The market’s next move will likely hinge on Bitcoin’s ability to retest $120,000 or collapse below $116,000. A successful retest could catalyze altcoin rallies, while a breakdown may trigger cascading sell-offs [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/]