Bitcoin drops below $108K as market flushes excess leverage amid rising volatility and ETF outflows
Technical Breakdown:-200-Day EMA Lost
Bitcoin fell to $107,800 Tuesday evening IST, dropping 2.5% intraday after touching $107,460 the lowest since last week’s crash. The critical development: BTC broke below its 200-day EMA at $109,500, a key technical level signaling potential medium-term weakness.
Bitcoin falls below 200-day EMA as market undergoes deep deleveraging with $320M liquidations and sustained ETF outflows
Ethereum fared worse, sliding 3.5% to $3,867 as altcoins extended losses. The CoinDesk 80 Index dropped 4.5% with CAKE and ETHFI both losing 10%. Total crypto market cap fell 2.3% to $3.70 trillion while Fear & Greed Index held at 33 (Fear).
$320M Liquidation Wave Hits Longs
The selloff triggered $320 million in 24-hour liquidations with longs taking 76% of losses. Bitcoin accounted for $88M, Ethereum $85M, reflecting the market’s “deep phase of deleveraging” per analyst Alex Hasn.
Liquidation Breakdown:
- Total: $320M (76% long, 24% short)
- BTC: $88M liquidated
- ETH: $85M wiped out
- Driver: Excess leverage flush as confidence fades
Futures open interest rose to $26.06 billion as traders re-engage, but funding rates turned neutral-to-positive indicating short conviction has cleared. OKX leads with 7.51% positive rate.
ETF Exodus Continues
U.S. spot Bitcoin ETFs saw $40.47M outflows Tuesday, extending the redemption streak. BlackRock’s IBIT led with $100.65M exit despite holding largest net inflows since inception. Ethereum ETFs suffered worse: $145.68M outflows led by BlackRock’s ETHA (-$117.86M) and Fidelity’s FETH (-$27M).
ETF Flow Crisis:
- BTC ETFs: -$40.47M Tuesday
- ETH ETFs: -$145.68M (one of largest single-day redemptions)
- BlackRock IBIT: -$100.65M
- Total AUM: Still strong but momentum fading
Short-Term Holders Underwater
BGeometrics data shows short-term holders facing average losses with purchase prices above $113,000. Current levels represent 4-5% underwater positions, creating selling pressure as these traders capitulate.
A SpaceX-linked wallet moved $268M in BTC after a 3-month pause, adding to uncertainty about large holder intentions.
CME Gap and $100K Risk
Traders eye the CME futures gap at $107,390 partially filled Tuesday but full closure would require further downside. Popular trader Daan Crypto Trades warns bulls must hold $107K to avoid signaling deeper weakness.
Key Levels:
- Support: $107K critical, then $104.5K, $100K psychological
- Resistance: $110K, $113.2K, $115K
- CME Gap: $107,390 target
- Bear Case: Break below $107K risks $100K-$98K retest
Options Market Shows Bullish Conviction
Despite price weakness, BTC options traders pay steep premiums for upside exposure. The 25-delta skew exceeds 11.86% across all timeframes, with implied volatility term structure upward sloping signaling expectations of increased future price swings and sustained rally potential.
Deleveraging Before Recovery?
Analyst Alex Hasn notes: “The broader crypto market continues to experience a deep phase of deleveraging, with traders stepping back as volatility rises and confidence fades. Should this pattern persist, it may later serve as a foundation for a more resilient bull recovery once macro and liquidity conditions improve.”
The market tests whether weekend’s bounce formed a “lower high” bearish pattern suggesting further downside. Break below $107K would confirm fears, while reclaim of $110K+ could spark short squeeze given high options skew.
Tuesday Summary:
- BTC: $107,800 (-2.5%), broke 200-day EMA at $109,500
- ETH: $3,867 (-3.5%), altcoins down 4.5%
- Liquidations: $320M (76% longs)
- ETF Outflows: BTC -$40.47M, ETH -$145.68M
- Market: Deep deleveraging phase, $107K critical support
