Key Points:
Bitcoin's price fell by 4% to $112,000, leading to a comprehensive market adjustment that resulted in $1.6 billion in long positions being liquidated.
Analysts pointed out that several on-chain bearish signals suggest that the Bitcoin bull market may be nearing its end.
According to a report from an institution, Bitcoin shorts continued to sell off on Monday, causing the price to drop to $112,000. This led to large-scale liquidations in the crypto market's leveraged positions.
Analysts indicated that, at the same time, Bitcoin has shown signs of "cycle fatigue," suggesting there may still be room for further declines.
Data from Cointelegraph Markets Pro and TradingView showed that Bitcoin's price fell to a low of $111,980 on Monday, down 4% within 24 hours, influenced by the overall market downturn.
Compared to the historical high of $124,500 set on August 14, Bitcoin's decline has widened to 10%, with large-scale liquidations occurring in the derivatives market.
The total amount of long position liquidations exceeded $1.62 billion, with Ethereum (ETH) accounting for $479.6 million. The liquidation amount for Bitcoin long positions was $277.5 million.
As shown in the chart below, the total liquidation amount for market long and short positions reached $1.7 billion.
The sudden market drop led to 402,730 traders being liquidated. Many investors were caught off guard, and investor sentiment quickly turned bearish.
The Bitcoin liquidation heatmap shows that liquidity is being consumed around the $112,000 price level, with over $400 million in buy orders in the $111,500 to $110,000 range.
Data indicates that this suggests Bitcoin's price may further decline, with the potential for a rebound after clearing the liquidity in that range.
The Federal Reserve's interest rate cut last week was seen as an important bullish catalyst for BTC, but it failed to drive the market up, indicating that the Bitcoin bull market may have entered its final phase.
Joao Wedson, founder of Alphractal, stated on the X platform on Monday, "Bitcoin has shown signs of cycle fatigue, but only a few have noticed."
Multiple on-chain signals currently warn that Bitcoin's upward momentum may have been exhausted.
The Spent Output Profit Ratio (SOPR) for Bitcoin shows a weakening in profitability, further increasing risk.
The Sharpe ratio is below the average level for 2024, indicating a decline in risk versus return.
Wedson added, "This will not attract as much institutional money as most expect."
According to CryptoQuant data, the active buy/sell ratio for Bitcoin across all exchanges is -0.79.
This indicator is below 1, indicating that shorts dominate the market; above 1 would show that longs are in control.
With a ratio of -0.79, the active selling volume has exceeded buying, reflecting weakened trader confidence and a bearish market atmosphere.
The last time a similar level was observed was on January 20, when Bitcoin rose to the $109,000 range, followed by a three-month adjustment period, during which BTC's price fell by 32% to $74,000 in April.
The active buy/sell ratio further confirms that the market is in a critical range, with selling pressure exposing the fragility of Bitcoin's price structure.
According to Cointelegraph, analysts currently have differing opinions on whether the market can rebound in October, as the market turned bearish on Monday.
Related: The largest long liquidation of the year: Five key points to watch for Bitcoin (BTC) this week.
This article does not constitute investment advice or recommendations. All investment and trading activities carry risks, and readers should conduct their own research before making decisions.
Original article: “Bitcoin (BTC) Shows Signs of 'Cycle Fatigue' as Price Drops to $112,000”
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