Bitcoin has fallen below the key support level of $115,000, recording its largest weekly drop.
Bitcoin ($BTC) fell below the key support level of $115,000 on Monday, retreating 7.5% from last week's historic high of $124,350, confirming the end of a two-month bull market that began in mid-June. This decline was triggered by a technical breakdown of the rising wedge pattern, indicating that buying momentum is gradually weakening. As of the time of writing, Bitcoin's current price is $116,066, with a low of $114,722.
Source: CoinGecko Bitcoin's current price is $116,066, with a low of $114,722.
Ethereum ($ETH) is also facing heavy selling pressure, dropping 3.33% to $4,329 within 24 hours, down more than 5% from the beginning of the month. Ripple ($XRP) performed even more weakly, breaking below the psychological barrier of $3 to $2.94, indicating a sharp decline in market risk appetite.
Vincent Liu, Chief Investment Officer of Kronos Research, stated that the recent decline in Bitcoin reflects investors' cautious sentiment after U.S. inflation data came in higher than expected.
Expectations for Fed rate cuts are cooling, and the overall economic environment is becoming unfavorable.
The main catalyst for the market correction comes from the U.S. Producer Price Index (PPI) for July, which increased by 3.3% year-on-year, higher than market expectations, undermining investors' confidence in a rate cut by the Fed in September. According to the CME FedWatch tool, the probability of a rate cut in September has dropped from nearly 100% last week to 83%, increasing the uncertainty in the overall economic environment and raising market risk aversion.
U.S. Treasury Secretary Scott recently stated that the government will not directly purchase Bitcoin as a strategic reserve, but will explore more 'budget-neutral' ways to expand reserves, further dampening market expectations of government support for cryptocurrencies. Currently, the fear and greed index shows 56, indicating that cryptocurrency investors are still in a 'greedy' state, but market sentiment has clearly cooled.
Source: (Crypto City) The current fear and greed index shows 56, indicating that cryptocurrency investors are still in a 'greedy' state.
Further Reading
U.S. July PPI far exceeds expectations! Bitcoin drops to nearly $117,000 overnight, with over $1 billion in liquidations across the network.
Is Bitcoin reserve no longer being done? One statement from the Treasury Secretary about not buying Bitcoin triggered selling pressure, followed by a rapid clarification.
A wave of leveraged liquidations has emerged, with $560 million in positions being forcibly closed.
According to Coinglass data, the cryptocurrency market experienced $560 million in forced liquidations in the past 24 hours, with long positions accounting for as much as $460 million and a long-short ratio reaching 5:1. Bitcoin alone saw over $130 million in liquidations, while Ethereum faced $230 million, and long positions in Solana and Ripple suffered losses of $29.21 million and $19.57 million respectively.
Source: Coinglass Real-time Liquidation Data
Andrew Kang, co-founder of Mechanism Capital, warned that Ethereum may face $5 billion in liquidation pressure, predicting that Ethereum's price could drop to the $3,200 to $3,600 range. He noted that as leveraged positions are liquidated, the market 'is not prepared for what will happen when buying pressure disappears.' This wave of liquidations reflects the issue of excessive leveraging in the market after reaching new highs, with poor risk management by investors leading to a chain reaction.
Source: X/@Rewkang Andrew Kang warned that Ethereum may face $5 billion in liquidation pressure, predicting that Ethereum's price could drop to the $3,200 to $3,600 range.
Technical indicators have turned bearish, and the key support level is precarious.
Technical analysis shows that Bitcoin's Relative Strength Index (RSI) has sharply dropped from near overbought levels to 47.42, forming a clear bearish divergence. Although the price reached a new high in August, the RSI created a lower high compared to July, indicating that upward momentum is waning. The Average Directional Index (ADX) is at 20.79, below the trend confirmation threshold of 25, suggesting that the market has entered a phase of consolidation without a clear direction.
Source: TradingView Multiple indicators for Bitcoin (RSI, ADX) are showing a bearish trend.
Short-term holders (STH) are beginning to exhibit loss-selling behavior, a phenomenon not seen since January 2025. CryptoQuant data shows that the number of active Bitcoin addresses has dropped by over 160,000 from a peak of 994,288 on August 14 within four trading days, reflecting a significant decline in retail participation.
Source: CryptoQuant The number of active Bitcoin addresses has decreased by more than 160,000, reflecting a significant reduction in retail participation.
Analysts believe that the $115,000 to $116,000 range will be a key 'success or failure' level for Bitcoin. If it successfully holds the $115,000 support, it may rebound to $121,000 or challenge the historic high again; however, if it breaks below this level, the next target will be $110,000, and in extreme cases, it could even test $105,000. The market is currently waiting for Federal Reserve Chairman Powell's speech at the Jackson Hole conference this week, as well as the initial unemployment claims data to be released on Wednesday, which will serve as important guidance for the next trend.
'Is the bull market over? Bitcoin once fell below $115,000, analysts say: support level is precarious.' This article was first published by 'Crypto City'.
