Bitcoin dropped 4.1% from $81,238 to $77,870 after its breakout above $81,000 reversed, triggering $270 million in long liquidations. Strong US spot ETF inflows suggest underlying demand has not disappeared.
Bitcoin fell below $78,000 after its breakout above $81,000 reversed, triggering a wave of long liquidations as traders took profits and unwound bullish leverage. Strong US spot ETF inflows, however, suggest underlying demand has not disappeared.
Bitcoin price retreats after $81K breakout
Bitcoin reached $81,238 on Tuesday after breaking out of a consolidation range that had held for about ten weeks. The move placed the cryptocurrency roughly 29.5% above its range low before sellers returned near the May high.
Price then fell to $77,870, a decline of about 4.1% from the peak. Bitcoin recovered toward $78,000, landing near the lower boundary of a short-term range identified by Bitfinex analysts. The reversal did not follow a confirmed news catalyst — instead, liquidation and open-interest data point to a derivatives reset after traders increased bullish exposure during the breakout.
CoinGlass data showed the wider crypto market recorded $324.4 million in liquidations over 24 hours, with long positions accounting for about $270 million, or 83% of the total. Bitcoin longs contributed about $109 million to those losses, and the largest single liquidation involved an $11.91 million Bitcoin position on Binance.
Falling open interest signals leveraged longs exited
Bitcoin futures open interest declined to $54.79 billion, down 1.5% from $55.64 billion at the previous reading. Open interest has now fallen about 4.5% from the $57.38 billion recorded near Bitcoin's $81,238 peak. Therefore, falling prices alongside lower open interest support the view that leveraged long positions were closed or liquidated rather than replaced by fresh short exposure.
Jeff Ko, chief analyst at CoinEx, told crypto.news that the initial short squeeze had largely run its course, leaving spot buyers responsible for extending the rally: According to CoinEx's Jeff Ko: "spot demand now has to lead rather than follow leverage". He added that open interest and funding rates still appeared restrained despite the recent volatility, which would reduce the risk of another large liquidation-driven reversal if it persists.
US Bitcoin ETF inflows support the spot-demand case
US spot Bitcoin ETFs recorded $314.3 million in net inflows on Aug. 25, according to data from SoSoValue, with BlackRock's IBIT leading the session at $284.4 million. Seven consecutive positive trading sessions brought cumulative inflows to approximately $2.57 billion, which Bitfinex said represented firm spot demand rather than a rally sustained mainly by speculative leverage.
Ko separately estimated the funds attracted roughly $1.9 billion during the week, describing it as the strongest weekly inflow of 2026.
Bitcoin must reclaim $80K to repair the breakout
Bitfinex analysts expect Bitcoin could consolidate between $77,100 and $80,000 before determining its next direction. The immediate support zone sits between $77,800 and $78,000, where buyers responded during the latest decline. A sustained break below that area could expose $76,500 to $77,000, followed by $75,700 to $76,000.
On the upside, Bitcoin must reclaim the $79,200 to $80,000 region to weaken the failed-break structure. A close above $81,100 to $81,250 would provide stronger confirmation that buyers have regained control. Ko identified May's high near $82,000 as the next difficult barrier, and said sustained ETF demand could support a move toward $85,000 to $90,000 because the source of demand will determine whether the advance holds.
Ko also described the Sept. 15 CLARITY Act vote as an active risk for Bitcoin, and noted that the 30-year Treasury yield had returned to 5.27% after reversing an earlier decline.
Source: crypto.news
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