- Bitcoin (BTC) rebounded from the recent sell-off, climbing back above $115,000 after a liquidation event that wiped out over $1 billion in leveraged positions.
- The latest correction was driven by weaker US employment data and a new wave of tariffs announced by the United States.
- QCP Capital views the sell-off as a “liquidation of leverage,” noting that Bitcoin’s broader structural setup remains intact.
Bitcoin (BTC) is showing a modest recovery as the East Asian trading day begins, trading at just over $115,000.
This recovery follows a sharp sell-off last week that liquidated more than $1 billion in leveraged long positions and briefly pushed the leading cryptocurrency down to around $113,000.
While the rebound is encouraging for bulls, the market remains precarious and investors are cautiously weighing signs of institutional stabilization amid persistent macroeconomic concerns.
Aftermath of the “leverage flush”: cautious optimism
The recent market correction, marking the third consecutive Friday decline for Bitcoin, was driven by a hawkish mix of macro factors.
Weaker-than-expected US jobs data combined with a fresh wave of tariffs announced by Washington sparked a broader risk-off sentiment that hit both equities and cryptocurrencies.
Altcoins bore much of the downside pressure, with Solana (SOL) falling nearly 20% over the week and Ethereum (ETH) losing close to 10%.
Despite the steep pullback, some market participants remain cautiously optimistic. Trading firm QCP Capital said in a Monday note that the “broader structural configuration remains intact,” pointing to Bitcoin’s record-high monthly close in July as a supporting data point.
QCP interprets the recent sell-off not as a fundamental trend reversal but as a necessary “leveraged flush”—a painful but healthy shakeout of overly leveraged positions that has historically cleared the way for renewed accumulation and the next upward leg.
Hedging and headwinds: investors still price downside risk
That said, market hedging behavior suggests investors have not ruled out deeper declines.
On prediction market Polymarket, traders currently assign a 49% probability that Bitcoin will drop below $100,000 before the end of 2025.
That represents a two-percentage-point increase from the prior day, indicating persistent short-term unease.
These prices reflect a market still on edge. Tail downside risk remains explicitly priced in despite a number of supportive long-term fundamentals, such as improving regulatory clarity, rising stablecoin adoption, and a wave of real-world asset tokenization initiatives.
An important near-term catalyst may come during the Asian trading session as US issuers report their latest ETF flows—typically released around midday Hong Kong time.
Early signs on this front look constructive: Bitwise reported $18.74 million in net inflows, a potential reversal following one of the largest single-day ETF outflows last Friday.
If ETF inflows continue to show strength and implied volatility begins to compress, that could confirm a market shift toward “buy the dip” sentiment and help markets shake off the macro-driven nervousness that has kept sentiment largely neutral.
Wider market snapshot
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BTC: Bitcoin has moved back above $115,000, signaling early signs of market stabilization after a volatile week.
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ETH: Ether is holding around $3,700, with Polymarket traders expressing confidence it could break $4,000 in August.
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Gold: Gold extended its rally for a third consecutive day on Monday, reaching a two-week high. The move was supported by weaker US economic data that increased expectations for a September Fed rate cut; CME traders now price an 86% chance of such a cut.
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Nikkei 225: Asia-Pacific markets opened higher after US President Donald Trump unveiled plans for a sharp increase in tariffs on Indian exports. Japan’s Nikkei 225 rose 0.54% at the open.
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S&P 500: US equities rebounded sharply on Monday, with the S&P 500 rising 1.47% to 6,329.94 points. The move snapped a four-day losing streak and was the index’s best single-session performance since May.