⚡ 1. Market Performance and Price Volatility
Plunge Market: Bitcoin plummeted sharply from the historical high of $123,236 on July 14, with a daily drop of over 5%, hitting a low of $116,300, before partially rebounding to the range of $117,200–$118,000.
Contagion Effect: Mainstream tokens such as Ethereum (ETH), Solana (SOL), and Dogecoin (DOGE) also saw a synchronized drop, with declines generally reaching 4%–8%.
Liquidation Scale: The number of liquidated contracts across the network surged to 135,800, with total liquidation amounting to $493 million (approximately 3.54 billion RMB), of which nearly 80% were long position losses.
⚙️ 2. Analysis of Plunge Causes
Profit Taking and Leverage Liquidation: Bitcoin has accumulated over 40% growth in the past three months, especially on July 14, when it surged 6.8% in a single day to reach a historic high, accumulating a large amount of profit-taking. Some hedge funds reduced positions above $120,000, triggering programmatic cascading sell-offs. High-leverage contracts (over 80% of accounts using more than 5x leverage) amplify volatility, as a 3% price change can trigger forced liquidations.
Impact of U.S. CPI Data: June CPI rose by 2.7% year-on-year (expected 2.6%), core CPI year-on-year at 2.9%. Concerns about inflation rebounding have increased, and the market expects the Federal Reserve may delay interest rate cuts, leading investors to withdraw from interest rate-sensitive risk assets.
Policy and Geopolitical Risks: Trump threatened to impose a 100% tariff on Russia, and the EU plans to retaliate with taxes on U.S. goods, escalating global trade tensions that heighten market caution. Meanwhile, the SEC may expand the regulatory scope of 'tokenized securities,' creating policy uncertainty that suppresses the market.
📊 3. On-chain Data and Market Structure Changes
Long-term holders remain confident: The Bitcoin balance on exchanges has dropped to a historical low of 14.5%, with whale addresses holding over 1,000 BTC rising to 2,135 (a new high for the year), indicating that large holders have not significantly exited.
Capital Outflow and Selling Pressure Signals: There was a net outflow of $477.9 million in spot trading in a single day, with some early holders ('Satoshi-era whales') selling to take profits; the on-chain metric Net Realized Profit and Loss (NRPL) surpassed $4 billion, indicating active profit-taking.
📉 4. Technical Analysis and Short-term Outlook
Key Support Level: $114,000 is seen as important support (previously triggered short covering), if breached, it may test the range of $110,000–$106,000; resistance is at $119,000–$122,000.
Indicators Turning Neutral to Bearish: The 4-hour chart's Supertrend flipped bearish ($121,563), MACD shows a death cross, and RSI fell to 48.5 (neutral to weak), with short-term volatility likely to continue.
🔮 5. Institutional Views and Long-term Predictions
Discrepancy in Nature of Correction: Institutions like Bitgo believe this is a 'standard adjustment following market overheating';
Bernstein maintains a year-end target price of $150,000, emphasizing that 'this cycle is led by institutional funds, fundamentally different from the retail bubble of 2017.'
Risk Warning: Matrixport warns that tightened regulations and tariff policies may long-term increase volatility;
Glassnode data shows that 98.9% of holdings remain profitable, but short-term selling pressure should be monitored.
💎 Summary
The Bitcoin crash on July 16 resulted from a combination of high leverage overheating, macroeconomic headwinds, and policy disturbances. Long-term confidence remains intact, but short-term volatility has intensified. Investors need to pay attention to U.S. PPI data (affecting interest rate cut expectations), regulatory legislative progress, and the effectiveness of the $114,000 support level.
