Bitcoin News Today: Bitcoin Slides Below $116K, Triggering $585.86M in Long Liquidations

More than half a billion dollars in crypto long positions were liquidated across markets on Friday as Bitcoin slid below $116,000, triggering widespread losses for leveraged traders. According to CoinGlass data, $585.86 million in longs were wiped out, with Bitcoin (BTC) accounting for $140.06 million of the total as its price fell 2.63% to $115,356. Ether (ETH) followed closely, with $104.76 million in liquidations as it dropped 1.33% to $3,598. Dogecoin (DOGE) led the top 10 cryptocurrencies in losses, plummeting 7% to $0.22 and erasing $26 million in long positions, per Nansen. Over the past 24 hours, the market saw 213,729 traders liquidated, with $731.93 million in total long and short positions erased.

The selloff caught many off guard, especially after Bitcoin hit an all-time high of $123,100 on July 14. The rapid reversal has intensified volatility, with traders scrambling to adjust positions as key support levels are tested. Despite the pullback, the Crypto Fear & Greed Index maintained a "Greed" score of 70 in its latest update, signaling lingering optimism among market participants.

The price action has exposed fragile equilibrium in the market. Bitcoin’s consolidation between $116K and $120K reflects ongoing tug-of-war between buyers attempting to retest highs and bears capitalizing on weakness. On-chain data shows a net outflow of 11.7K BTC from exchanges, suggesting whale accumulation, but derivatives markets reveal short positions dominate at 53.1%, highlighting bearish sentiment. Meanwhile, institutional activity remains a stabilizing factor, with ETF inflows totaling $6.6 billion in late July despite a $131.35 million outflow in early July. Companies like MicroStrategy continue bulk Bitcoin purchases, reinforcing structural support for the asset.

Altcoins have absorbed a surge in capital inflows amid Bitcoin’s consolidation. The broader crypto market saw a $216 billion increase in altcoin market cap over two weeks, the largest rise on record. Ethereum has emerged as a focal point, with perpetual trading volumes surpassing Bitcoin’s for the first time since 2022. Solana, XRP, and tokens like UNI have also seen open interest grow by $18 billion in July alone. However, the rapid rotation has pushed altcoin open interest beyond the +2 standard deviation threshold for leverage, signaling overbought conditions and raising concerns about sharp corrections.

Retail sentiment has deteriorated sharply, with weighted sentiment dipping below -1.03 and Social Dominance falling to 27%—levels last seen in late 2024. New UTXO creation, a proxy for grassroots buying, has slowed, reflecting waning FOMO-driven demand. For individual investors, the event underscores the importance of risk management strategies such as dollar-cost averaging, stop-loss orders, and stablecoin hedges to navigate liquidity shocks.

The path forward hinges on Bitcoin’s next move. A sustained break above $120K could reignite the uptrend and further boost altcoins, while a breakdown below $116K risks cascading losses, particularly in leveraged altcoins. The Altcoin Season Index, near 50, suggests early-stage capital rotation but highlights the market’s vulnerability to overbought conditions. As the sector evolves, a diversified, data-driven approach rooted in understanding market structure and risk remains critical for managing exposure.

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/]