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BTC Struggles Below $117K: Will Buyers Return?
Bitcoin is grappling with the aftermath of a sharp pullback, as the market digests a $19 billion leverage flush and a notable slowdown in ETF demand. While some see the downturn as a healthy reset, confidence remains fragile.
“It was a structural flaw magnified by excessive leverage and thin liquidity,” said Thiago Duarte, Market Analyst at Axi, in a statement to Decrypt.
According to analysts, the latest decline was less about fundamentals and more about flushing out speculative excess. The result: Bitcoin has now entered a critical price zone between $108,400 and $117,100, with over 5% of the circulating supply currently held at a loss within this range.
Critical Support Range in Focus
Market observers warn that without a fresh catalyst to push prices above the $117,100 threshold, Bitcoin could face deeper losses. A sustained move below the lower bound of this range would indicate “structural weakness” and potentially open the door to a broader correction, Glassnode noted in a recent report.
Confidence Building Remains Elusive
“The crypto market is still in a confidence-rebuilding and bottom-forming phase,” said Tim Sun, senior researcher at HashKey Group, in an interview with Decrypt.
Sun highlighted the influence of macroeconomic uncertainty — including global trade tensions and tight liquidity conditions — on market sentiment. Long-term investors have reportedly reduced their holdings by around 300,000 BTC, indicating ongoing profit-taking rather than panic selling.
He added that the recent deleveraging “could temporarily slow institutional inflows,” and that investor sentiment remains “highly sensitive to news flow and macro indicators.”
Signs of Stability Emerging?
Despite near-term headwinds, some see reasons for cautious optimism. A K33 Research report released Tuesday suggests that similar wipeouts in open interest have often coincided with market bottoms in the past. The firm pointed to a still-supportive backdrop, citing “expansionary policy expectations, high institutional demand, and pending ETF catalysts.”
“If risk sentiment stabilizes, Bitcoin could retest the upper range fairly quickly,” said Robin Singh, CEO of Koinly, a crypto portfolio and tax tracking firm.
However, Singh also warned that uncertainty surrounding U.S. inflation data or trade policy could keep price action volatile in the coming weeks.
ETF Flows and On-Chain Activity Still Key
Glassnode remains cautious, emphasizing that any meaningful recovery will depend on the return of steady ETF inflows and increased on-chain accumulation. Without these key signals, the market could remain in a holding pattern, vulnerable to further downside.
