Bitcoin (BTC) dropped to its weakest level since July 8, as over $530 million in leveraged positions were liquidated across the crypto market, fueling heightened volatility and intensifying bearish sentiment.

The sell-off came after aggressive selling from large Bitcoin holders, triggering a cascade of stop-losses on major exchanges. According to data from Coinglass, long positions accounted for the majority of the liquidations, underscoring how bullish traders were caught off-guard by the sudden downturn.

Technical Picture: Divergence and Broken Support

Despite some optimism among traders, technical signals remain mixed. On lower-timeframe charts, analysts highlighted a bullish Relative Strength Index (RSI) divergence, where momentum indicators show signs of strength even as prices fall. Market commentator Javon Marks suggested this could support a rebound toward $123,000, representing a potential 15% recovery from current levels.

However, broader trend indicators are flashing caution. The RSI pattern mirrors warning signs last seen during the 2021 cycle peak, where similar divergences preceded sharp pullbacks. Importantly, the $112,000 support zone has already collapsed, leaving BTC vulnerable to further downside. Analysts now point to $108,000 as the next line of defense, with a breakdown opening the door to deeper declines toward the $105K–$100K range.

Macro and Seasonal Pressures

The decline isn’t purely technical. Fresh U.S. inflation data, particularly from the Personal Consumption Expenditures (PCE) index, underwhelmed investor expectations for a near-term Federal Reserve rate cut. As a result, global risk sentiment soured, pulling crypto markets lower in tandem with equities.

Adding to bearish momentum, September has historically been one of Bitcoin’s weakest months, with average negative returns across past cycles. This seasonal trend, combined with macro headwinds, could amplify volatility if bearish pressure persists.

Market Outlook

• Short-term outlook: Bulls may attempt a relief rally if the RSI divergence plays out, with $120K–$123K acting as the near-term upside target.

• Mid-term risk: Failure to hold $108K could accelerate losses, exposing BTC to the $100K zone.

• Macro impact: Fed policy signals and broader risk sentiment will remain decisive in shaping Bitcoin’s next major move.

Key Takeaways

• Bitcoin slumped to its lowest price since July 8 amid $530M in market liquidations.

• Technical support at $112K failed, raising the risk of a slide toward $105K–$100K.

• A bullish RSI divergence offers hope of a short-term rebound.

• Macroeconomic uncertainty and September’s weak seasonality weigh heavily on the outlook.

While Bitcoin still holds above six figures, the latest breakdown in market structure and the scale of liquidations highlight ongoing fragility. Unless buyers reclaim momentum quickly, the $100K level could be tested in the near term, making the coming weeks pivotal for BTC’s broader trend.