Bitcoin Drops Below $116K in a Brutal Leverage Flush

The Bitcoin price crashed through the $116,000 floor in a sharp and sudden downturn that wrecked nearly a quarter million traders in its path. The result? A staggering $700 million in total liquidations across crypto, with longs taking the lion’s share of the pain.

According to CoinGlass, more than 213,700 traders were liquidated in the last 24 hours, as BTC dropped 2.63% to $115,356, nuking $140 million in long positions. Ethereum was next on the liquidation leaderboard, with $104.76 million of ETH longs wiped out as the token slipped to $3,598, down 1.33%.

Bitcoin has recovered slightly to $117,000, Source: Bitcoin Liquid Index

One word: leverage.

Crypto trader Ash Crypto summed it up in a post on X:

“This dump is a pure leverage flush. Many people longed alts after they saw ETH pumping hard, so market makers dumped and liquidated the late longs.”

Translation: too many degens got greedy, FOMO’d into altcoin longs after Ethereum surged, and handed market makers a perfect setup for a liquidity raid. Classic whipsaw. The data backs that up. Across the board, the majority of pain came from long positions—traders betting on further price gains who instead got taken to the woodshed.

Dogecoin led the bleeding among top 10 tokens, dropping 7% to $0.22 and burning through $26 million in long liquidations, per Nansen.

Even with the dramatic flush, sentiment hasn’t fully turned. The Crypto Fear & Greed Index still sits at 70, firmly in “Greed” territory.

That makes this even more dangerous, because the market hasn’t flushed out optimism yet. Bitcoin only just hit an all-time high of $123,100 less than two weeks ago (on July 14), and many are still eyeing higher targets.

Galaxy Digital CEO Mike Novogratz doubled down Thursday, saying ETH is heading for at least $4,000, roughly a 10% upside from current levels. Meanwhile, Bitfinex analysts see Bitcoin’s next key level at $136,000, assuming the uptrend resumes.

With so many leveraged traders still clinging to bullish setups, any further downturn could set off another round of cascading liquidations. For instance, a drop back to $119,500 would threaten to liquidate another $3.07 billion in short positions—so the pressure is building on both sides.

Markets like this don’t break because of bearish fundamentals, they break because of overconfidence and leverage stacking. What we saw Friday was not a collapse in belief, but a cleansing of overextended bets. Whether it was the final shakeout before another leg up, or the first sign of a broader reversal, is still unclear.

As Bitcoin Vector wrote on X, “Bitcoin’s drop isn’t a breakdown, it’s a healthy correction. Structure remains bullish, the optimal signal was cooling but now shows the first signs of recovering momentum. BTC is holding above support, though we could still test 112.5K. 

 Momentum paused, but the trend is intact, source: X