Essential Insights:
Bitcoin fell below $111,500, approaching a significant daily demand area.
Ongoing spot demand remains robust, supporting a generally bullish market structure.
Investors may be attracted to price levels around $113,000, $107,200, and $100,000.
During the Asian market session on Monday, Bitcoin (BTC) dropped below $111,500, clearing out internal liquidity between $115,000 and $114,000 and probing a daily demand zone spanning from $110,700 to $113,200. This dip jeopardizes BTC’s support from the 50-day exponential moving average (EMA) if the daily candle closes below $113,200.
Cointelegraph noted the potential for this retest last week, indicating a dip below $113,000 before a bounce back. Following a brief bullish reaction to the Federal Reserve’s interest rate cut on Wednesday, which brought BTC to $117,500, the rally failed to establish a bullish structural break, resulting in the ongoing correction.
Despite this downward movement, the market structure remains largely supportive. Data from CryptoQuant suggests that investors have been actively buying into the dip, with the Coinbase Premium Index indicating strong positive sentiment. This suggests that US spot demand is acting as a buffer against deeper declines.
On-chain metrics reinforce this understanding. Bitcoin researcher Axel Adler Jr. pointed out that spot demand has been steady over the last month, with total apparent demand reaching 95,800 BTC. Continuous accumulation is helping maintain price action near the upper limit of the recent range, despite short-term weakness in futures markets.
Additionally, around $280 million in BTC futures positions were liquidated during the correction, removing leverage that accumulated as BTC rose to $117,500 from $107,000 in September. This resetting of excessive leverage could set the stage for a healthier market rally, provided spot demand continues.
Related: Bitcoin shows signs of ‘cycle exhaustion’ as BTC price tumbles to $112K
Crucial Bitcoin Price Levels to Monitor
With Bitcoin now trading just below $113,000, three key price levels emerge from a trend analysis.
The first is the demand zone between $110,700 and $113,200. A swift rebound from this range would validate that the recent decline was a leverage correction, eliminating excess speculative positioning.
Crypto analyst Dom observed that futures markets recently experienced one of the largest long liquidations in recent memory, with almost 80% concentrated on Bybit. Such occurrences typically reset market dynamics, allowing for a more straightforward upward movement. A rapid recovery from this zone could see BTC surpass $117,000 in the near term.
If recovery is sluggish, Bitcoin may drift towards additional liquidity or support around $107,200. BTC has frequently oscillated between higher timeframe range highs and lows before resuming broader trends in 2025. More than $3 billion in long positions are currently vulnerable at this level, increasing the likelihood of a liquidity grab before a bullish reversal occurs.
Historically, September has leaned bearish, rendering this scenario plausible as a short-term shakeout before stronger upward momentum into Q4.
The third and most pessimistic scenario would involve a sustained breakdown below $107,200, potentially extending toward $100,000. This would indicate a structural transition toward bearish market conditions, with lower-level consolidation suggesting a cycle’s exhaustion.
Supporting this perspective, Glassnode indicated that the cost basis for short-term holders is around $111,400. Prolonged trading below this crucial threshold could solidify a shift to a mid- to long-term bearish structure.
Related: Biggest long liquidation of the year: 5 things to know in Bitcoin this week
This article does not provide investment advice or recommendations. All investment and trading activities involve risks, and readers should conduct their own research before making decisions.
