What to Know:
- Bitcoin drops to $114,128 after six days of losses, down from its all-time high of $123,200 in July.
- ETFs inflows are slowing down as institutions become more cautious, and technical problems cause $204 million in long liquidations.
- As the dollar gets stronger and retail activity slows down, macro and retail pressures increase.
Bitcoin dips to a three-week low of $114,128 on Thursday after six days of losses. This move shows that the market has changed a lot since its July rally, when Bitcoin hit an all-time high of $123,200 during a record rally.
The July surge was powered by a historic influx of capital into ETFs in the U.S. and broader optimism about institutional involvement all around the world. However, that bullish momentum has quickly faded.
According to CoinMarketCap, Bitcoin’s 24-hour drop of 2.46% to $115,368.70 reflects a mix of technical breakdowns, macroeconomic headwinds, and deteriorating investor sentiment. After the price dropped below the support level of $118,859, which was the 23.6% Fibonacci retracement level, over $204 million worth of positions were liquidated, mostly long positions.
There were weak signs of momentum that supported this technical breakdown. The MACD histogram went down a lot, and the Relative Strength Index fell to 49.44, which is below the levels where it was overbought. This means that the market is neutral but risky.
ETF Inflows Lose Steam
Bitcoin ETFs saw $6 billion in net inflows, the third-best month ever, while Ether ETFs pulled in $5.4 billion, a record, according to Bloomberg data. These inflows drove the total crypto market capitalization above $4 trillion for the first time.
But as August began, that momentum dried up. Analysts now see early signs of institutional caution. The Coinbase premium, a key indicator of U.S. investor appetite, flipped negative this week after staying positive for nearly two months, according to CryptoQuant. Meanwhile, open interest in Bitcoin and Ether futures on the CME has declined 13% and 21%, respectively, from July peaks.
Traders Brace for Downside
Options markets have shifted decisively bearish. The 30-day Bitcoin skew, a measure of sentiment in options pricing, flipped from +3% to -1.5%, indicating that puts (bets on price declines) are now priced higher than calls.
“This indicates strong demand for downside insurance, as traders expect one to two months of bearish price action,” said Nick Forster, founder of crypto options platform Derive.xyz. He added that the end of July saw a massive wave of profit-taking, with $6–8 billion in realized gains, and roughly $10 billion worth of BTC was sold over-the-counter on July 15, resulting in a sharp 4% drop that day.
Even Bitcoin miners are cashing out. Over 15,000 BTC were sold after the new all-time highs, contributing to the selling pressure.
Macro and Retail Weakness
Outside of the charts, macroeconomic factors have made things worse. The U.S. dollar has gotten stronger, going up 3% in the last six days because of new trade tariffs. Such volatility has made people less interested in dollar-denominated assets like Bitcoin.
Also, it seems that retail interest is starting to fade. Binance Research says that on-chain activity from regular users has dropped to 70% of what it was in December 2024, even though ETFs are getting a lot of interest from institutions. The Crypto Fear & Greed Index has dropped from “Greed” (62) to “Neutral” (57), which shows that people’s feelings have changed.
What’s Next for Bitcoin?
Bitcoin is now at a crucial point. Will it stay above the 38.2% Fibonacci retracement level at $116,240, or will it test the $114,500 support level again, which is psychologically important?
Even though things are tough right now, there is still structural support. Notably, institutional investors like Strategy Inc. have filed for a $2.52 billion IPO, and the money from that is expected to be used to buy BTC. But we still don’t know if institutional strength alone can make up for retail retreat and macro uncertainty. It looks like traders are getting ready for a rough third quarter. The market is likely to be more volatile as it processes profits and adjusts its expectations.
Also Read: Bitcoin Price Far From Peak as New Investor Dominance Hits 30%
