Bitcoin price capitulated in favor of the bears after struggling to secure bullish momentum at the $110,000 level.
BTC USD extended its downside below the $108,000 support level, trading at $106,901.59 at the time of writing.
Bitcoin price previously respected a short-term ascending support line, which aligned with the $110,000 support level.
However, a wave of sell pressure and weak demand ensured the bearish outcome.
BTC price hovered just above $108,000 at the time of observation, which was within yet another key support area.
This particular level was even more critical because it might have to contend with more sell pressure if this support level fails. The next key Bitcoin price support area was within the $100,000 level.
Key Reasons Behind Latest Bitcoin Price Decline
BTC’s extended decline in the second half of the week reflected the overall market conditions.
Even the stock market has been facing significant downward pressure in the last 24 hours, thus pointing to macro conditions as the biggest factor.
Most of the top 50 coins were in the red on both the 24-hour and 7-day time frames. The biggest macro events of the week have so far been rising geopolitical tensions, especially those involving tariff wars.
Weak demand from whales and institutions also underpinned recovery attempts after the Trump tariffs-induced crash last week.
Another potential reason behind the liquidity exodus might be the ongoing gold rally. The precious metal has been sucking liquidity from the markets as investors continued treating it as a haven.
Gold surged above $4300 in the last 24 hours and that was the first time it has soared that high.
An extended leverage shakedown may also be among the contributing factors for the declining Bitcoin price. The cryptocurrency collectively registered $236 million worth of liquidations in the last 24 hours.
Just over $178 million worth of liquidations affected long positions. Spot flow data revealed a bearish bias, with roughly $369 million worth of spot outflows.
What Bitcoin Liquidation Map, Whale Activity Reveal
Bitcoin (BTC USD) spot and derivatives data disclosed the level of sell pressure and liquidations. However, a deeper dive revealed some interesting details that may point to where the market was headed next.
Recent market dynamics revealed that the market has been hunting for leveraged positions. Price may thus have an incentive to go where more liquidations are likely to take place.
Bitcoin’s liquidation map revealed that the cumulative leveraged long positions were to be liquidated near the $100,000 price level.
Just over $447 million worth of longs will be liquidated if BTC USD pushes to $100,000. Only a 10X leverage appetite was observed in this case.
On the other hand, short positions, including those taking on higher risk through leverage, were actually higher.
For context, the cryptocurrency had approximately $667 million worth of shorts that were to be liquidated above $112,000.
Moreover, roughly $69 million worth of those positions executed 100X leverage and $14 million worth of positions with 50X leverage.
This reflects the sentiment that there were more sellers than buyers.
The exchange liquidation heat map showed that roughly $1.5 billion worth of cumulative long positions were at risk if the price dipped to $100,000.
On the other hand, there were roughly $2.2 billion worth of cumulative short positions risking liquidation near the $112,000 level.
Meanwhile, whales leaned in favor of a bullish bias on Thursday. They executed over $31 million worth of spot BTC purchases on OKX and Binance.
However, they increased their exposure to a potential rally to $3.8 billion in the last 24 hours.