Bitcoin News Today: Bitcoin Slumps 1.8% as Institutions Offload $3.7B, Triggering $500M in Liquidations

Bitcoin faced significant selling pressure in early July 2025 as large institutional players and short-term holders offloaded billions in BTC, triggering over $500 million in liquidations. CryptoQuant analyst Maartunn highlighted that Galaxy Digital, a major crypto financial services firm, moved $3.7 billion worth of Bitcoin to exchanges, with 26,100 BTC sold at a loss by short-term holders (STHs) within a 10-hour period [1]. Galaxy clarified that the movement involved client assets rather than its own, but the impact on market sentiment was immediate.

Bitcoin’s price dropped 1.8% to $116,365 amid heightened volatility, with 24-hour trading volume surging 37% to $131.6 billion, according to Coinglass data [1]. The sell-off coincided with a $531 million liquidation of leveraged options positions, predominantly long bets by traders who had anticipated higher prices. BRN Research Analyst Valentin Fournier noted that this reset of overleveraged positions could create a "healthier market foundation," though short open interest now exceeds $2.8 billion, raising the risk of a short squeeze if Bitcoin rebounds [1].

Analysts pointed to the broader implications of the selloff. Open interest in Bitcoin futures increased by $3.8 billion, reflecting intensified speculative activity [1]. Meanwhile, the Crypto Fear & Greed Index remained at 70, indicating cautious optimism despite the downturn. However, Myriad Market users projected limited upside, with only 38% expecting the index to reach 72 by July 29.

Institutional activity provided a counterbalance to retail-driven declines. Farside Investors reported net deposits of $226 million into Bitcoin ETFs on July 24, preventing the funds from recording a weekly loss. Yet, traders had withdrawn $285 million from BTC funds between July 21–23, underscoring uneven investor sentiment [1].

The liquidations underscored the fragility of leveraged positions. Over $721 million in leveraged trades were erased in a 24-hour period, with Ethereum witnessing larger losses than Bitcoin. Analysts attributed the volatility to a combination of margin calls, institutional selling, and market participants recalibrating risk exposure [2]. Despite the turbulence, some players positioned for long-term gains. Michael Saylor’s Strategy Inc. expanded its preferred equity offering to $2 billion, aiming to fund further Bitcoin accumulation, a move seen as a vote of confidence amid short-term pain [2].

Source: [1] [Decrypt] [https://decrypt.co/331776/billions-bitcoin-sold-exchanges-liquidations] [2] [CryptoRank] [https://cryptorank.io/news/feed/52772-over-500m-in-longs-wiped-out-as-bitcoin-slips-below-116k]