Bitcoin Price Drops to Lowest Level Since July as Liquidations Surpass 530 Million Dollars
Bitcoin is facing a significant test of its recent strength as its price has fallen to its lowest point since early July. This sharp downturn has triggered a wave of liquidations across the market, exceeding 530 million dollars in a single day and putting a key bullish signal at risk of failing.
The sell-off has brought Bitcoin dangerously close to a critical support level that has held strong for months. A decisive break below this level could open the door for a much deeper correction, with some analysts pointing to a potential drop toward the 108,000 dollar mark if bearish momentum continues to build.
This recent weakness is particularly concerning for bulls because it is happening despite a potentially positive technical setup on the charts. Prior to this drop, analysts had observed a bullish divergence forming on the Relative Strength Index, or RSI. This type of divergence occurs when the price of an asset makes a lower low, but the RSI indicator makes a higher low. It is traditionally interpreted as a sign that selling pressure is waning and that a trend reversal to the upside could be imminent.
However, the power of this bullish signal is being severely tested by the current market pressure. The failure of this RSI divergence to immediately halt the price decline suggests that underlying selling forces are stronger than anticipated. This has shifted the focus from potential upside to key downside levels that must hold to prevent a more severe crash.
The massive liquidations are a primary driver of the accelerated downward move. When leveraged long positions are forcibly closed by exchanges, it creates a cascade of selling as assets are automatically sold to cover the losses. This 530 million dollar liquidation event, with the majority being long positions, acts as a fuel source for the bears, pushing the price down further and triggering even more liquidations in a negative feedback loop.
Market sentiment has noticeably shifted from greed to a more cautious and fearful stance. Investors are now closely watching the order books around the 108,000 dollar area. This level is not just a psychological round number but is also considered a major technical support zone based on previous price action. A sustained break below it could trigger a new wave of panic selling, as it would represent a breakdown of the market structure that has supported Bitcoin’s price for the latter part of the summer.
For the bulls to regain control, they must quickly defend this crucial support level. A strong bounce and a daily close above it could help to neutralize the immediate bearish threat and potentially allow the market to stabilize. However, if the selling pressure persists and Bitcoin closes decisively below this floor, the path of least resistance would be lower, confirming the bearish momentum and likely leading to a test of even deeper support levels. The next few days are critical in determining whether this is a healthy pullback within a larger bull market or the start of a more significant corrective phase.
