FameEX Hot Topics | With Key Price Supports Falling, Bitcoin Traders Focus on Downside Liquidity: Could $107K Be Next?

Bitcoin (BTC) slipped below the $111,500 mark during Monday's Asian market session, triggering a liquidation of $280 million in leverage long positions. The price drop cleared out internal liquidity between the $115,000 and $114,000 levels, while testing a critical daily demand zone between $110,700 and $113,200. This move places BTC at risk of losing support from the 50-day exponential moving average (EMA), particularly if its daily candle closes below the $113,200 threshold. A brief bullish reaction to the Federal Reserve's interest rate cut lifted Bitcoin to $117,500 earlier in the week. However, the rally lacked the momentum to create a definitive bullish breakout, resulting in the current price correction.

Despite the recent dip, the broader market structure remains constructive. According to CryptoQuant data, investors have been buying aggressively into the dip, with the Bitcoin Premium Index showing a strongly positive reading. This indicates that demand from U.S. spot markets is providing a buffer against further downside pressure. On-chain data further supports this view, with Bitcoin researcher Axel Adler Jr. pointing out that spot demand has remained stable over the past month. A total of 95,800 BTC has been accumulated, suggesting that sustained demand is keeping Bitcoin's price action near the upper band of its recent range, even as futures markets show signs of short-term weakness.

The recent correction resulted in the liquidation of nearly $280 million in Bitcoin futures positions, which had built up during BTC's rise from $107,000 to $117,500 in September. The liquidation process flushed out the excessive leverage that had accumulated during the rally. This reset of leverage in the market may pave the way for a healthier continuation, provided that spot demand continues to support price action. The market's focus is now on whether Bitcoin can stabilize and rebound from its current price zone, with several critical price levels playing a key role in determining its short-term direction.

Bitcoin is currently hovering just below $113,000, with three crucial price levels standing out from a trend perspective. The first is the demand zone between $110,700 and $113,200. A sharp rebound from this area would confirm that the recent drop was merely a leverage flush, clearing out speculative positions. Crypto analyst Dom noted that the liquidation of long positions during the correction is one of the largest in recent months. Such liquidations often serve as a market reset, providing room for a cleaner upward move. If Bitcoin recovers swiftly from this zone, it could potentially push back above $117,000 in the short term.

However, if Bitcoin's recovery is slow, it may continue drifting toward external liquidity or find support around $107,200. At this level, more than $3 billion in long positions remain exposed, increasing the likelihood of a deeper liquidity grab before a bullish reversal. Supporting this downside risk, Glassnode data suggests that the short-term holder cost basis is near $111,400. If Bitcoin sustains trading below this key level, it could signal a shift to a mid- to long-term bearish market structure, as the battle between bulls and bears intensifies. As Bitcoin continues to navigate through these critical levels, market participants will closely monitor both spot demand and leverage to assess the next potential move.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.