Institutional Buys Clash with Market Sell-Off as Bitcoin Nears Critical Support

Bitcoin faces a potential short-term correction amid heightened liquidations and leveraged long positions, despite maintaining a price above $100,000. Recent data from Coinglass reveals a record $1.65 billion in crypto market liquidations on September 22, 2025, with Bitcoin-specific losses totaling $285.92 million in long positions. This follows a 2.24% drop in BTC’s price to $111,478 during Asian trading hours, triggering the largest single-day liquidation since mid-June. The selloff has been exacerbated by outflows from U.S.-listed spot Bitcoin ETFs, which saw a $368 million exodus on September 21, the highest since mid-AugustBitcoin Price Forecast: Will BTC recover or resume its correction?^[1]. Analysts attribute the volatility to excessive bullish positioning, with the CryptoQuant BTC Estimated Leverage Ratio (ELR) nearing its annual peak of 0.291, though still below the 2011 record of 0.358Bitcoin Price Forecast: Will BTC recover or resume its correction?^[1].

Technical indicators suggest a "dead-cat bounce" scenario, where a temporary rebound could fail to reverse the broader downtrend. On the 4-hour chart, Bitcoin broke below a key ascending trendline and the 50-day EMA, closing at $112,900 as of September 23. The RSI at 36 indicates oversold conditions, potentially setting the stage for a short-term recovery toward the $114,790 level, a critical Fibonacci retracement zone. However, a failure to surpass this level could trigger a correction toward $107,429Bitcoin Price Forecast: Will BTC recover or resume its correction?^[1]. Daily charts show further bearish momentum, with the RSI at 45 and a bearish MACD crossover signaling continued downward pressureBitcoin Price Forecast: Will BTC recover or resume its correction?^[1].

Corporate demand remains a bright spot, with major institutional players expanding their Bitcoin holdings. Japanese firm Metaplanet added 5,419 BTC ($632.5 million) to its treasury, bringing total holdings to 25,555 BTC. Similarly, MicroStrategy’s Strategy added 850 BTC, raising its total to 639,835 BTC. These purchases highlight ongoing institutional confidence, though analysts caution that such activity may not offset macro-driven selling pressureBitcoin Price Forecast: Will BTC recover or resume its correction?^[1]. Bitfinex analysts note that while ETF outflows stabilize, Bitcoin could test $115,000 by week’s end if funding conditions remain neutral, but a breakdown below key support could push prices toward $108,000Bitcoin Price Forecast: Will BTC recover or resume its correction?^[1].

Market structure analysis underscores the risk of further corrections. The 50-day EMA at $113,200 remains a critical support level; a breach could signal a shift in market dynamics. On-chain data from Glassnode shows concentrated liquidation activity around the $113,000–$114,000 range, where leveraged longs are particularly vulnerableWatch These Bitcoin Price Triggers as Price Dips to …^[5]. Additionally, the TD Sequential indicator on the 4-hour chart has triggered a buy signal, historically associated with short-term bottoms, while an inverse head-and-shoulders pattern suggests a potential bullish reversal if confirmedBitcoin Tests Critical Support at $112K as $280M in Leveraged Longs Get Liquidated^[2].

The broader market context includes elevated volatility linked to the Federal Reserve’s upcoming rate decisions and inflation data. The Personal Consumption Expenditures (PCE) report in late September could influence Bitcoin’s trajectory, with mixed outcomes expected depending on whether the Fed signals further rate cuts or maintains a hawkish stance. Analysts at Mosaic Asset Company note that 19 Fed officials are divided on future rate paths, with seven opposing additional cutsWatch These Bitcoin Price Triggers as Price Dips to …^[5]. Meanwhile, speculative short-term trading in Bitcoin futures remains overheated, with open interest exceeding $220 billion and perpetual futures volumes outpacing spot trading by 8–10 timesWhy September 2025 Could Trigger Record Liquidations^[4].

Despite the near-term risks, some analysts remain cautiously optimistic. The MVRV (Market Value to Realized Value) metric from CryptoQuant indicates the market is in a "pre-euphoria" phase, historically preceding major bull market peaks. While the divergence between long-term and short-term holder profitability has not yet reached extreme levels, it suggests a strong foundation for a potential rallyWatch These Bitcoin Price Triggers as Price Dips to …^[5]. However, the current correction may serve as a necessary "leverage flush," clearing excess speculation and creating a cleaner base for future price discoveryBitcoin Price Forecast: Will BTC recover or resume its correction?^[1].