Bitcoin News Today: Bitcoin's Liquidity Crisis Unveils a Bear Market Crossroads

Bitcoin and Ethereum faced a sharp decline over the past week, with both cryptocurrencies experiencing significant volatility amid growing bearish sentiment. Bitcoin dipped below $113,000 at the Wall Street open, marking its lowest level since August 3, as bullish support failed to hold against repeated U.S. selling pressures. Exchange order books showed heavy bid liquidity being taken, particularly around the $112,300 mark, which has emerged as a focal point of interest for traders [1]. Analysts have raised concerns about potential price manipulation, citing movements in bid liquidity as signs of orchestrated market behavior. Notably, Keith Alan of Material Indicators highlighted the possibility of "plunge protection" at $105,000, suggesting coordinated actions to influence Bitcoin's direction [1].

Ethereum also experienced a notable drop, falling to $4,354.00 from near its $4,800 record last week. Over the past 24 hours, the market saw over $500 million in liquidations, with Bitcoin long positions alone accounting for $124 million of forced selling. Ethereum’s long liquidations reached $184 million, exacerbating downward pressure across the market [2]. This wave of forced selling was partly triggered by profit-taking and macroeconomic concerns, particularly the July wholesale inflation data, which raised doubts about the likelihood of a September Federal Reserve rate cut [2]. The uncertainty has led to a broader bearish outlook, with traders preparing for further declines, especially in the event of continued weak data.

Speculative traders are now building significant leveraged short positions, particularly in Ethereum, marking the largest-ever leveraged short postion for the asset according to CME Group data [3]. This reflects a de-risking trend as traders brace for the Federal Reserve's Jackson Hole symposium, a key event that often influences market sentiment. The event is expected to provide insights into the Fed's monetary policy path, with markets currently pricing in an 80–95% probability of a 25-basis-point rate cut at the September meeting [1]. Analysts like Michaël van de Poppe and BitBull have pointed to the possibility of a consolidation phase between $112K and $120K for Bitcoin, with some cautioning that a capitulation below $112K could signal the start of a bear market [3].

In addition to macroeconomic factors, market structure indicators are showing signs of weakness. For the first time since January 2025, Bitcoin's short-term holders (STHs) are back to selling at a loss, according to CryptoQuant analyst Kerem. This shift is historically significant, often preceding deeper corrective phases or serving as a reset before a stronger rally [4]. The current price action reflects increased volatility and a shift in momentum toward the bears, with Bitcoin consolidating near the $115,000 level. Key technical levels, including the 50-day moving average and the $123,217 resistance, remain under close scrutiny [4].

The market is closely watching whether the current pullback is a healthy consolidation or a precursor to a more significant downturn. While some traders remain optimistic, citing parallels to historical bull-market corrections in 2017 and 2021, others are taking a cautious approach given the high levels of short positions and the potential for cascading losses in altcoins [1]. The upcoming release of jobless claims data and the Fed’s Jackson Hole speech will likely play a decisive role in determining the near-term trajectory of Bitcoin and Ethereum [3].

Source:

[1] Bitcoin analysts point to 'manipulation' as BTC price falls to 17-day low (https://cointelegraph.com/news/bitcoin-analysts-point-to-manipulation-as-btc-price-falls-to-17-day-low)

[2] Bitcoin sinks to $115000 after hitting its newest record, as ... (https://www.cnbc.com/2025/08/18/crypto-market-today.html)

[3] Bitcoin, Ether set for squeeze as traders go record short ... (https://cointelegraph.com/news/bitcoin-ether-eye-short-squeeze-as-traders-build-largest-ever-eth-short)

[4] Bitcoin Short-Term Holders Flip To Losses For First Time ... (https://www.mitrade.com/insights/news/live-news/article-3-1052333-20250820)