Bitcoin dipped to as low as $101,899.01 on Monday, backing off the recent $105,000 highs due to a combination of long liquidation pressure, decreased leverage, and profit-taking.
Crypto analyst Ali Martinez took to X, saying that $1.45 billion worth of long positions on these exchanges would be liquidated if Bitcoin dropped to $102,700.
The risk that a liquidation cascade might be ahead has caused traders to take in a heavier dose of caution over the market.
Fresh numbers from on-chain analytics platform CryptoQuant reveal a significant drop in the Estimated Leverage Ratio (ELR) for all exchanges, which suggests investors are shedding leverage bets. This reduction in leverage usually means less risk appetite and the expectation of increased volatility.
The Spent Output Profit Ratio (SOPR) — an indicator of whether Bitcoin holders have sold at a profit— has also turned down, suggesting more investors are taking losses. The shift from profit to loss increases market selling pressure.
Even with these signs of institutional resistance, retail trading volumes remain high. CryptoQuant’s retail activity index continues to track an upward trend in frequency of trading, which shows that retail investors are still engaging frequently and have not pulled back significantly.
The decline in Bitcoin price is occurring while markets are looking for broader macro signals like the 90-day U.S.-China tariff pause and responding to changes in sentiment from leveraged traders.
Analyst Ali also compares the current Bitcoin chart to the pattern from 2021-22 and anticipates a situation where history might repeat. Both patterns show the same strong breakout, followed by a steep decline.
The post gives an indication that even with the bullish momentum up, the structure of the chart could repeat the last significant top, which is a warning signal for deciding about the possibility of another plunge ahead.
