Sell-off September Strikes Bitcoin, Lifting Risk For New Low

The key takeaways

• Bitcoin dropped below $111500 and tested a daily major demand zone.

• Market structure is largely in favor of the bulls as long as spot demand remains high.

• Investors may be interested in price levels of $113,000 to $107,200 and even $100,000.

BitcoinBTCThe price of bitcoin (BTC) dropped below $111500 on the Asian markets session Monday. This cleared out liquidity within the $115,000-$114,000 range and tested a demand zone for daily trading between $110700 and $113200. BTC is at risk of losing its support from the exponential 50-day moving average, if it closes below $113,000.

Cointelegraph highlighted The likelihood of this retest was projected last week. It predicted that the price would dip below $113,000 and then resume its upward trajectory. BTC rose to $117.500 on a short-lived rally following the Federal Reserve interest rate reduction of Wednesday. However, the rally did not create a bullish structure break, which led to this current correction.

Market structure is still positive, despite recent market declines. CryptoQuant data implied The Coinbase Premium Index showed a strong positive trend. It was clear that US demand for spot products provided some cushioning against further downward pressure.

The data on the chain supports this story. Bitcoin researcher Axel Adler Jr. noted It is clear that the spot demand for BTC remains constant over the course of a month. The price is still near the top of its recent range due to the accumulation that has been taking place, even though futures markets are showing short-term weakness.

During the correctional period, BTC futures positions worth close to $280m were also liquidated, removing leverage built up during BTC’s rise to $117.500, from $107,000, in September. The market’s excessive leverage may have been reset and the spot price could continue to rise if demand remains strong.

Related: Bitcoin shows signs of ‘cycle exhaustion’ as BTC price tumbles to $112K

Bitcoin Price Levels to Watch

Bitcoin’s current price is just over $113,000; three key levels from a market perspective are evident. 

A sharp rebound from this area would confirm that the recent drawdown was a leverage flush, clearing excess speculative positions. This area’s sharp recovery would indicate that recent draws were a lever flush to clear excess positions. 

Crypto analyst Dom noted Bybit accounted for nearly 80% of all long-term liquidations on the futures market in recent months. This type of event can reset market conditions and allow for an upward move. BTC’s short-term recovery could take it back to the $117,000 mark if this zone is quickly recovered.

Bitcoin’s recovery may be slow and it could instead move towards external liquidity. BTC has repeatedly The market moved from highs to lows in higher-time frame periods before returning to broader trends by 2025. At this point, more than $3 billion of long positions were exposed. This raised the risk that a liquidity grab could occur before a bullish turn. 

Seasonally, historically, September is a bearish month. This scenario could be a plausible short-term shakeup before a stronger upward momentum in Q4.

A prolonged decline below $107200 could extend to $100,000. It would signal a structural change towards bearish conditions with the market consolidating at lower levels to indicate exhaustion. 

Glassnode is a risk-supporting device. highlighted The short-term cost basis for holders is around $111400. Trades below the price of this “battle line” A transition from a bullish to a bearish structure could be made between mid to long term.

Related: Biggest long liquidation of the year: 5 things to know in Bitcoin this week

This article contains no investment recommendations or advice. Risk is inherent in every investment decision and trade. The reader should always do research prior to making a final decision.