Bitcoin Price Drops From $116K as $125M Liquidations Hit Traders: Analysts Call It a Buy Signal

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The Bitcoin price slipped after a failed push above $116,000, triggering roughly $125 million in liquidations and a fresh bout of risk-off across altcoins.

The pullback follows last week’s tariff-driven shock and Monday’s fade from resistance, with traders eyeing whether the dip sets up the next leg higher, or a deeper test of support.

Bitcoin Price Rejected at $116K, Liquidations Flush Leverage

After rebounding more than $15,000 off the weekend low, the Bitcoin price stalled near $111,500, a level that’s repeatedly attracted seller interest and profit-taking. As price rolled over, a wave of long liquidations swept through derivatives venues, wiping out overleveraged positions and cooling overheated funding.

BTC's price trends to the downside on the daily chart. Source: BTCUSD on Tradingview

Short-term, $111,000 has emerged as an initial demand zone, with deeper supports clustered near $110,000 and the psychological $105,000–$108,000 band. A decisive daily close back above $116,000 would reassert bullish control and put the prior high back in focus.

Macro headlines continue to frame intraday swings. Tariff uncertainty recently amplified volatility across risk assets, though a softer tone from both Washington and Beijing has tempered worst-case fears. That shift helped stabilize crypto broadly, but BTC’s latest rejection shows bulls still need a clean catalyst to reclaim the trend.

Sentiment Capitulation: “Buy-the-Fear” Signal?

On-chain and social gauges flash a familiar pattern: retail FUD peaked into the drop while “smart money” accumulated, according to market analysts.

Santiment’s Brian Q. noted that spikes in negative retail sentiment have repeatedly preceded short-term reversals this cycle, from spring tariff scares to summer geopolitical headlines.

Several technicians also highlight a bullish MACD cross on higher time frames, a setup that appeared before previous alt-season advances, even as near-term chop persists.

Strategists point to improving market structure after the liquidation sweep: lower funding, cleansed leverage, and still-elevated spot participation. That mix often precedes range rebuilds and trend continuation, provided key supports hold and macro rhetoric doesn’t re-ignite broad de-risking.

What to Watch Next

Key technical levels remain clear for traders. Immediate support is seen between $110,500–$111,000, followed by a deeper cushion at $110,000. A decisive close above $116,000 would confirm renewed bullish momentum, while a drop below $110,000 could expose Bitcoin to the $105,000–$108,000 range.

Beyond Bitcoin price action, attention turns to Bitcoin ETF net flows and stablecoin liquidity, which signal broader market participation. Sustained inflows would strengthen the buy-the-dip narrative, while macro factors, such as tariff headlines or surprise data, could still trigger volatility.

Cover image from ChatGPT, BTCUSD chart from Tradingview

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