Bitcoin News Today: Bitcoin plummets 2.63% below $116K as $585.86M in crypto longs liquidated

Over the past 24 hours, the cryptocurrency market experienced a sharp selloff as Bitcoin (BTC) fell below $116,000, triggering massive liquidations of long positions. According to CoinGlass data, $585.86 million in long positions were wiped out across the market, with Bitcoin accounting for $140.06 million of losses as its price dropped 2.63% to $115,356 [1]. Ether (ETH) followed closely, with $104.76 million in liquidations after a 1.33% decline to $3,598. Dogecoin (DOGE) led the top 10 cryptocurrencies by market capitalization in losses, falling 7% to $0.22 and wiping out $26 million in long positions, per Nansen data [1]. The total liquidations across the market over the same period reached $731.93 million, liquidating 213,729 traders amid widespread panic [1].

The downturn has exposed vulnerabilities in leveraged positions, particularly in the wake of Bitcoin’s July 14 all-time high of $123,100, which had fueled optimism about a sustained bull run. Despite the pullback, the Crypto Fear & Greed Index remains at a “Greed” score of 70, indicating lingering bullish sentiment [1]. However, technical indicators and on-chain metrics paint a more cautious picture. Bitcoin’s price action has tested the $116,000–$120,000 range, a critical battleground for bearish and bullish forces. A sustained break below $116,000 could retest the 50-day EMA at $110,589, while a rebound above $120,250 might reignite the uptrend. Derivatives markets show short positions dominating at 53.1%, with the long/short ratio at 0.88, signaling an overbought condition that could trigger a short squeeze if stabilization occurs [1].

Institutional investors have maintained a mixed approach, with $6.6 billion in ETF inflows recorded in late July despite a $131.35 million outflow earlier in the month. Entities like MicroStrategy continue to accumulate Bitcoin as a strategic reserve asset. Retail sentiment, however, has sharply deteriorated, with weighted sentiment dropping below -1.03 and social dominance sinking to 27%, levels last seen in late 2024 [1]. Declining new UTXO creation further signals a lack of grassroots buying, suggesting the current cycle lacks the retail-driven fervor seen in prior bull runs.

The altcoin market has surged amid Bitcoin’s consolidation, with a $216 billion rise in market cap over two weeks—the largest increase on record. Ethereum has emerged as the primary beneficiary, with open interest dominance hitting 38%, its highest since April 2023, and perpetual trading volumes surpassing Bitcoin’s for the first time since 2022 [1]. Solana, XRP, and smaller-cap tokens like UNI have also seen open interest swell by $18 billion in July alone. However, altcoin open interest has exceeded the +2 standard deviation threshold for leverage for 12 consecutive days, raising concerns about overbought conditions and potential corrections.

For individual investors, the key takeaway is diversification. Portfolios overly concentrated in Bitcoin or high-leverage altcoins face heightened exposure to liquidity shocks. Dollar-cost averaging, stop-loss orders, and stablecoin hedges are increasingly essential tools in this environment. The Altcoin Season Index, now near 50, suggests early-stage capital rotation but also highlights the market’s susceptibility to overbought conditions [1]. The path forward hinges on Bitcoin’s ability to reclaim the $120,000 level. A sustained breakout could propel altcoins further, with Ethereum and Solana likely leading the charge. Conversely, a breakdown below $116,000 risks triggering a cascading sell-off, particularly among leveraged altcoins.

Source: [1] [Bitcoin's $116K–$120K Consolidation and the Implications] (https://www.ainvest.com/news/bitcoin-116k-120k-consolidation-implications-altcoins-2507/) [1] [Bloodbath for crypto longs as Bitcoin tumbles below $116K] (https://cointelegraph.com/news/crypto-longs-liquidated-market-downturn-bitcoin-price-decline)