Bitcoin’s price dipped below $115,000 on August 1, marking its lowest point since July 11 following a period of high volatility. This decline came after reaching an all-time high of $123,000 on July 14, signifying a 7% pullback from the peak. The crypto market’s performance in late July was characterized by significant instability.
The early part of July saw a rapid upward trend for Bitcoin. Within 24 hours between July 10 and 11, the price surged from $110,000 to $118,000, representing a 7.2% increase in a single day. This spike coincided with a wave of leveraged short liquidations in derivatives markets, sparking speculation about growing institutional interest.
Following this surge, Bitcoin continued its rally, hitting an all-time high of $123,000 on July 14. However, this level acted as a temporary barrier. Despite several attempts to consolidate above $118,000 throughout the latter half of July, Bitcoin struggled to regain bullish momentum.
During this consolidation phase, intraday fluctuations narrowed, indicating weakening buying pressure. Some traders believed that profit-taking by early investors and cautious positioning before the Federal Reserve’s inflation guidance, which kept rates at 4.4%, contributed to the stall.
Today’s correction was exacerbated by over-leveraged positions in perpetual contracts.
Liquidation data showed that more than $705 million in long positions were wiped out on major exchanges in the past 24 hours, with Binance and Bybit accounting for over 67% of the total.
These liquidations coincided with Bitcoin’s drop below $115,000, intensifying the downward momentum and pushing the price to levels not seen since the rally on July 10. Market data also revealed over $12 million in BTC-specific liquidations in the past hour alone, confirming further unwinding of leveraged positions.
Despite the sell-off, Bitcoin’s price is still up by more than 8% since the beginning of July. If BTC breaches the $113,500-$114,000 support range, there is a possibility of revisiting consolidation zones near $110,000 from early July. On-chain metrics, such as declining active addresses and decreasing exchange outflows, also point to a short-term bearish outlook, as per data from Glassnode.
The broader altcoin market mirrored Bitcoin’s losses, with Ethereum dropping 6.4% to $3,611, and Solana and XRP each falling over 7% in the same 24-hour period. Long liquidations across the market exceeded $680 million, making up more than 93% of total liquidations, indicating a heavy long position bias in derivatives markets before the correction. This imbalance in leverage likely contributed to the swift decline, as high-risk assets amplified losses amid decreasing BTC prices.
It is also plausible that Bitcoin followed altcoins this time, with over-leveraged altcoins retracing after the ‘alt season’ rally in July.
Bitcoin’s drop to $114,000 led to a decrease in the fear and greed index, shifting from ‘greed’ to ‘neutral’ after a period of bullish sentiment.
Despite the recent decline affecting short-term sentiment, Bitcoin’s price remains significantly above its consolidation range around $100,000 in June and its 4-month low of $74,000, indicating a positive long-term outlook despite the current market turbulence.
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