Crypto's $10 Billion Shakeout: Why Bitcoin's Rally Just Hit a Wall
Bitcoin (BTC-USD) extended its slide for a fifth straight session, dipping as much as 2.2% to $113,979 its lowest level in nearly a month as investor enthusiasm continues to cool following July's all-time high. That peak, which saw Bitcoin touch $123,200 just before President Donald Trump signed the country's first crypto regulatory framework into law, now feels like a distant memory. Ether also retreated sharply, falling 4.5% to $3,567, while the broader digital asset market gave back some of its recent gains after briefly crossing a $4 trillion market cap milestone last month.
The rally had been fueled by blockbuster ETF flows Bitcoin products attracted $6 billion in net inflows in July (third-best on record), while Ether ETFs brought in $5.4 billion, marking their strongest month yet. But momentum is showing signs of fatigue. Bitcoin's Coinbase premium a real-time measure of US investor appetite flipped negative this week for the first time in two months, according to CryptoQuant. Futures open interest on CME has dropped 13% for Bitcoin and 21% for Ether from their July peaks. These shifts suggest that institutions could be taking a more cautious stance as Q3 gets underway.
Traders appear to be repositioning quickly. Over $800 million in leveraged long positions were liquidated in the past 24 hours alone including $251 million tied to Ether and $200 million to Bitcoin, based on Coinglass data. At the same time, downside protection is gaining traction. Nick Forster, founder of Derive.xyz, noted that Bitcoin's 30-day options skew has swung from +3% to -1.5%, pointing to rising demand for puts over calls. Roughly $10 billion in BTC was sold OTC on July 15, triggering a 4% price dip, he added. Miners also sold off about 15,000 BTC after the record high. Meanwhile, Coinbase (NASDAQ:COIN) shares fell as much as 17% after Q2 revenue came in below estimates, underscoring a broader pullback in retail and institutional engagement alike.
This article first appeared on GuruFocus.
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