Bitcoin Drops 4% After Tariff News as Short-Term Holders Sell $18B

Key Insights:

• $195M in long BTC positions liquidated after tariff announcement
• $18.24B sold by short-term holders in a single day
• August and September historically have a 67% chance of BTC price declines

Bitcoin fell 4% from $118,920 to $114,000 following the U.S. announcement of new tariffs, sparking sharp market moves. According to CryptoQuant, over $195 million in long positions were liquidated across exchanges during the sell-off. The liquidation wave reflects leveraged traders exiting positions rapidly in response to macroeconomic developments.

Data shows that $18.24 billion in Bitcoin sold yesterday originated from short-term holders, based on Glassnode metrics. Long-term holders largely maintained positions, highlighting the selling pressure as concentrated among weaker hands. 

Spent volume analysis shows short-term holder activity dominating, with a notable spike in volumes during the price decline.

Meanwhile, Binance data indicates that BTC inflows have been rising steadily since early July. Daily inflows climbed from 5,300 BTC to 7,000 BTC, marking a shift in exchange activity after a prolonged downtrend since March.

Historical Weakness Adds to Downside Risk

Seasonal trends are adding to concerns. Lookonchain notes that August and September are historically the weakest months for Bitcoin, with declines recorded in eight of the past twelve years. This equates to a 67% probability of negative returns during this period.

Short-term holder outflows to exchanges spiked to 21,400 BTC at a loss, a pattern similar to sell-offs on July 15 and July 25. On-chain data places immediate support at $111,600, with technical support at $112,000 and trader realized price at $105,500.

Bitcoin’s current position sits at the edge of a major on-chain support cluster. If this level fails, market depth data suggests minimal structural support until lower price ranges. The absence of strong bid liquidity could increase the speed and depth of a potential correction.

However, a recovery above recent highs could improve sentiment, but downside risk remains elevated given historical patterns and current market structure.