Institutions Buy the Dip as Bitcoin’s $1.7B Liquidation Wave Hits 397,000 Traders
Aime Summary
Bitcoin fell below $113,000 on Monday, triggering a wave of liquidations that wiped out $1.7 billion in crypto positions over the past 24 hours, according to data from Coinglass[1]. Over 397,000 traders were liquidated, with 95.08% of the losses attributed to long positions, underscoring the market’s excessive bullish exposure. The largest single liquidation occurred on OKX, where a $12.74 million BTC-USDT-SWAP position was erased[1]. The price drop pushed BitcoinBTC-- to an intraday low of $111,800, intensifying bearish momentum as the Fear and Greed Index slipped to 45, indicating heightened caution among investors[1].
The correction followed Bitcoin’s failure to hold above the $116,000 support level last week, breaking below the 50-day Exponential Moving Average (EMA) at $113,926[1]. Technical indicators point to further downward pressure: the Relative Strength Index (RSI) fell to 43, and the Moving Average Convergence Divergence (MACD) lines signaled an impending bearish crossover[1]. Analysts suggest that if Bitcoin closes below the 50-day EMA, the price could extend its decline toward $107,245, a key support level[1]. However, a rebound above $113,926 might retest the $116,000 threshold, offering a potential floor for recovery[1].
Despite the selloff, institutional demand for Bitcoin remained resilient. Japanese investment firm Metaplanet added 5,419 BTCBTC-- to its holdings, bringing its total to 25,555 BTC[1]. Similarly, Europe’s First Bitcoin Treasury Company Capital B increased its reserves by 551 BTC, now holding 2,800 BTC[1]. Spot Bitcoin ETFs recorded $886.65 million in inflows last week, marking the fourth consecutive week of positive flows[1]. These developments highlight persistent institutional interest in Bitcoin despite short-term volatility.
The liquidation event coincided with broader market stress. The total crypto market cap fell below $4 trillion, with altcoins losing nearly all their recent gains[3]. EthereumETH-- dropped over 7%, while SolanaSOL-- and DogecoinDOGE-- fell 8–10%[3]. The Altcoin Season Index dipped to 62, signaling waning optimismOP-- for a sustained altcoin rally[3]. Meanwhile, the taker buy/sell ratio stood at -0.79, reflecting a bearish imbalance in trading activity[3]. Analysts warned that Bitcoin’s Spent Output Profit Ratio (SOPR) indicated weakening profitability, a sign often linked to distribution phases in previous cycles[3].
Market participants are closely watching upcoming macroeconomic data and central bank statements for clues about Bitcoin’s next move. Fed Chair Jerome Powell’s cautious stance on rate cuts and synchronized tightening by Gulf central banks have dampened expectations for sustained easing[3]. Analysts like Michael van de Poppe and Ted Pillows highlighted the need for Bitcoin to reclaim $113,500 to avoid a potential correction toward $106,000[3]. At press time, Bitcoin traded at $112,875, down 2.4% in the past 24 hours[3].
The liquidation spike underscores the risks of leveraged trading in low-liquidity environments. Over $1.34 billion in long positions were erased in a 12-hour window, with Bybit reporting $712 million in liquidated positions[3]. The RSI briefly dipped below 20, indicating forced selling rather than organic bearish pressure[3]. Traders are now bracing for potential volatility ahead of the Fed’s PCE price index data and comments from over 10 Fed officials, including Powell[3].
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