Bitcoin Price Forecast - BTC-USD Drops to $110,770 After $500 B Crypto Selloff

Bitcoin (BTC-USD) Extends Decline as Tariff Shock Triggers $500 B Selloff

Bitcoin’s sharp correction deepened this week, with BTC-USD falling 4% to $110,770 by mid-session Tuesday, erasing part of Monday’s fragile rebound. The cryptocurrency has now lost roughly $15,000 from last week’s $126,000 record high, its steepest weekly drop since March 2024. The catalyst was President Trump’s surprise decision to impose 100% tariffs on Chinese goods, igniting a global risk-off wave that erased $500 billion in total crypto-market value within days. During the flash plunge, BTC briefly touched $102,000, triggering nearly $20 billion in forced liquidations across derivatives exchanges before stabilizing near $111 K. Citigroup analysts noted that futures cracked first as equity markets sold off, underscoring the asset’s rising correlation with risk assets. Despite the turmoil, ETF inflows into Bitcoin funds stayed positive, showing that new institutional buyers are using less leverage than in previous cycles.

Technical Compression Around $109K–$116K Keeps Traders Split

Daily-chart structure shows BTC-USD trapped between the 100-day moving average near $116 K and the 200-day MA around $107 K. The zone between $108 K and $110 K remains a pivotal demand cluster repeatedly defended by responsive buyers. On shorter timeframes, a horizontal range persists, capped by mid-range resistance at $116 K and supported near $109 K. Repeated rejections at the upper boundary illustrate waning momentum, yet every dip below $110 K draws immediate absorption. A decisive four-hour close above $116 K could propel BTC toward $120 K, while a breakdown under $108 K** risks revisiting the $102 K–$104 K liquidity pocket identified on Binance’s three-day heatmap. That heatmap shows dense short-liquidation clusters between $115 K and $118 K, hinting that a sharp move through this band could fuel a rapid liquidity squeeze higher.

Triple-Top Risks Confront Bitcoin After Record Highs

Technicians are debating whether the price action since July has carved out a rare triple-top formation. Bitcoin’s earlier breakout above the three-month trading range briefly reached $126 K, but fading momentum and a bearish RSI divergence warned of exhaustion. The subsequent retreat back to the range’s lower boundary near $107 K suggests buyers may be losing control. If the 200-day MA fails, downside extensions toward $93 K—the next confluence of long-term support—become plausible. Conversely, a sustained recovery above $123 K would invalidate the pattern and project an upside target near $139 K, derived from the measured range height.

Whale Activity and Market Psychology Shift After Liquidations

Blockchain data shows a dramatic clearing of leverage. More than 210,000 traders were liquidated during the recent selloff, the largest deleveraging since 2022. Yet on-chain metrics reveal whales quietly accumulating around $109 K, exploiting reduced funding rates. A reported $392 million short placed by one large address last week coincided with Bitcoin’s failure to hold $116 K, amplifying the cascade lower. Since then, open interest has normalized, and the fear-and-greed index sits at 38, firmly in fear territory. This sentiment reset often precedes medium-term recoveries, provided structural support zones hold.

Institutional Anchors and Treasury Accumulation Steady Sentiment

Corporate accumulation remains a key stabilizer. BitMine Immersion Technologies (NYSE: BMNR) disclosed total reserves of $13.4 billion, including 192 BTC and 3.03 million ETH, making it the second-largest corporate crypto holder after MicroStrategy (MSTR), which owns roughly 640,031 BTC worth $73 billion. CEO Tom Lee highlighted that deleveraging “pushes assets below fair value and opens strategic entry points,” signaling a contrarian bullish stance. ETF providers added a combined $2.7 billion in new Bitcoin exposure last week after $3.2 billion the week prior, confirming persistent institutional demand even amid volatility.

Macro Headwinds: Trade War, Dollar Strength, and Fed Uncertainty

Bitcoin’s correlation to global macro drivers intensified as the dollar strengthened and gold surged to record highs. The U.S. Dollar Index (DXY) held near 98.9, while gold reached $4,156 per ounce—evidence that traditional hedges are regaining favor. Bond yields slipped, with the 10-year Treasury at 4.05%, reflecting a global dash for safety. Beijing’s vow to “fight to the end” in the trade dispute, coupled with new Chinese export controls on rare-earth materials, fueled fears of prolonged decoupling. Market participants now await Fed Chair Jerome Powell’s statement for clues on policy direction amid a government shutdown that has delayed inflation data.

Chart Signals Point to Oversold Conditions but Weak Momentum

Momentum indicators imply a possible base but not yet a confirmed reversal. The RSI at 36 signals oversold territory, and daily candles show spinning-top formations, typically preceding direction shifts. Still, Bitcoin remains pinned below its 50-day EMA near $115,700, which must be reclaimed to restore a constructive bias. The broader pattern resembles a triple-bottom setup around $109,600, a level repeatedly defended since August. A close above $114,500–$116,000 would validate the pattern and open a path toward $119,800–$125,000, while continued failure at resistance risks renewed testing of $104,000.

Emerging Catalysts: ETF Inflows, AI-Linked Adoption, and Layer-2 Growth

Beyond short-term volatility, structural demand remains intact. Institutional adoption is expanding through regulated ETFs and treasury strategies tied to AI-driven analytics platforms. ARK Invest, Pantera Capital, and Galaxy Digital have all increased positions in funds tracking BTC-USD, framing Bitcoin as a high-beta macro hedge. Meanwhile, the launch of Bitcoin Hyper, a Solana-powered Layer 2 integrating Bitcoin security with SVM-based smart contracts, marks an effort to bring transaction speed and programmability to the network. The project’s presale surpassed $23.4 million, reflecting appetite for scalable Bitcoin-anchored ecosystems.

Sentiment Divergence Between Retail and Institutions

Retail traders remain cautious, evidenced by thinning spot volumes on major exchanges, while professional desks quietly accumulate. CME-futures positioning shows leveraged funds net-short by 7,800 contracts, yet asset-manager longs hit a two-month high. This bifurcation highlights the tension between macro-driven pessimism and strategic accumulation by long-term allocators.

Strategic Outlook and Verdict

All major indicators converge on a market in transition: over-leveraged longs have been purged, volatility remains elevated, but structural inflows persist. Immediate bias stays neutral-to-bearish while BTC-USD trades below $116 K, with risk of retests toward $107 K. However, a daily close above that threshold would signal the start of a recovery phase targeting $120 K–$125 K. Considering liquidity resets, ETF support, and corporate accumulation, the medium-term setup leans constructive once $116 K is reclaimed.

Verdict: HOLD → Short-term cautious, medium-term bullish if BTC-USD closes above $116,000.

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