Bitcoin's price fell below the $111,500 mark on Monday, triggering a significant liquidation of leveraged long positions totaling approximately $280 million. The decline has pushed the cryptocurrency into a critical support zone, leaving traders and investors to watch whether the price will rebound or face a more substantial correction.
Key Takeaways
- Bitcoin's price dropped below $111,500, entering a key daily demand zone between $110,700 and $113,200.
- The price move led to the liquidation of roughly $280 million in leveraged long futures positions.
- Despite the futures market sell-off, on-chain data indicates that spot market demand remains strong, particularly in the U.S.
- Analysts are closely monitoring support levels at $110,700, $107,200, and the psychological barrier of $100,000 to determine the next trend.
Details of the Recent Price Correction
During the Asian trading session, Bitcoin (BTC) experienced a notable price decrease, falling from previous highs to test a significant area of support. The move cleared out liquidity that had built up between $114,000 and $115,000.
This correction places Bitcoin at risk of closing below its 50-day exponential moving average (EMA), a technical indicator often used to gauge short- to medium-term trend direction. A daily close under the $113,200 level would confirm this break, potentially signaling further downside pressure.
The downturn followed a failed attempt to establish a new high. After a brief rally to $117,500 last week, spurred by the Federal Reserve's interest rate decision, the momentum stalled. This failure to create a bullish break of structure left the market vulnerable to the correction that followed.
Leverage Flush
The price drop resulted in the liquidation of nearly $280 million in long positions. This event removes excessive leverage from the market, which can sometimes create a more stable foundation for a future price recovery.
Contrasting Signals from Spot and Futures Markets
While the futures market showed weakness due to the cascade of liquidations, the underlying spot market tells a different story. Data suggests that institutional and retail investors are using this price dip as a buying opportunity.
According to data from CryptoQuant, the Coinbase Premium Index has remained strongly positive. This index measures the price difference between Bitcoin on Coinbase (primarily U.S. investors) and other exchanges. A positive premium suggests that demand from U.S.-based spot buyers is robust, providing a potential price floor.
"This indicated that US spot demand was providing a cushion against deeper downside pressure," analysts noted, pointing to the resilience in the spot market.
On-chain data further supports this view. Bitcoin researcher Axel Adler Jr. highlighted that apparent spot demand has been consistent over the last month, with an estimated 95,800 BTC accumulated by buyers. This sustained accumulation helps keep the price within the upper portion of its recent trading range, even as leveraged traders face pressure.
Critical Bitcoin Price Levels to Monitor
With Bitcoin trading in a precarious position, analysts have identified three key price levels that could determine its next major move. Each level represents a different potential outcome for the market in the short to medium term.
Scenario 1: A Rebound from the $110,700 Zone
The first and most immediate area of interest is the current demand zone, which spans from $110,700 to $113,200. If Bitcoin can find strong buying support here and stage a sharp recovery, it would suggest that the recent drop was primarily a technical event designed to flush out speculators.
Crypto analyst Dom observed that this was one of the largest long liquidations in recent months, with a high concentration on the Bybit exchange. Such events often reset the market, allowing for a more sustainable upward trend. A quick bounce from this level could see BTC challenge the $117,000 resistance again.
Scenario 2: A Deeper Test at $107,200
If the recovery is slow or fails to materialize, the price could drift lower to test the next major support level around $107,200. This area represents external liquidity and has served as a pivotal point for Bitcoin's price action throughout 2025.
Historical Precedent
From a seasonality perspective, September has historically been a bearish month for Bitcoin. This trend makes a deeper shakeout plausible before a potential rally into the fourth quarter of the year.
A significant amount of long positions, estimated at over $3 billion, remain exposed at this level. A move down to $107,200 could be a strategic liquidity grab by larger players before a significant reversal to the upside.
Scenario 3: A Bearish Breakdown Toward $100,000
The most bearish scenario would involve a sustained breakdown below the $107,200 support. Such a move would likely signal a major shift in market structure, indicating that the current bullish cycle may be exhausted.
In this outcome, Bitcoin could extend its losses toward the psychologically important $100,000 level. Consolidation at these lower levels would suggest that sellers have taken control of the market trend for the foreseeable future.
On-Chain Data Highlights Key Battle Line
Adding another layer to the analysis, data from Glassnode shows that the cost basis for short-term holders is currently near $111,400. This metric represents the average price at which recent market participants purchased their Bitcoin.
This level is often considered a critical "battle line" between bulls and bears. If the price remains consistently below this threshold, it can lead to selling pressure as newer investors look to exit their positions at a loss.
A sustained period of trading below the short-term holder cost basis could confirm a transition to a more bearish market structure, aligning with the third scenario of a deeper correction.
Ultimately, the market is at a crossroads. The strength of spot buyers is currently being tested by the unwinding of leverage in the futures market. The price action over the coming days will be crucial in determining whether Bitcoin can hold its ground and resume its upward trajectory or if a more significant downturn is imminent.
