A significant sell-off of Bitcoin led to prices falling below $110K amid wider dollar fluctuations.
by VT Markets
/
Aug 25, 2025
Bitcoin faced heavy selling on August 26, 2025, with 24,000 Bitcoins sold quickly, pushing the price down sharply.
After a brief recovery, Bitcoin’s value dropped below $110,000, reaching a recent low. This drop coincided with a broader move back to the US dollar, following losses linked to comments from Powell.
Higher Volatility Expected
The rapid decline below $110,000 signals that we can expect more volatility in the coming weeks. The 30-day implied volatility has surged over 70%, making options much pricier. This indicates that traders are preparing for larger price fluctuations than we have seen lately.
This price movement has triggered a major shift in the futures market, with over $500 million in long positions wiped out in just one day. Major exchanges are now showing negative funding rates, suggesting traders are more willing to pay for short positions. This reflects a growing bearish outlook among leveraged traders.
For those with large spot positions, it’s a good time to think about hedging strategies. Buying put options with strike prices around $100,000 or $95,000 can protect against further losses. This is a smart decision given the strength of the US dollar after Powell’s comments last week at Jackson Hole.
The large, focused selling is reminiscent of the deleveraging events we saw in 2022. Back then, similar forceful moves often led to broader market sell-offs and longer downturns. We should be wary that this might not just be a one-time event but the beginning of a larger unwinding of positions.
Opportunities For Reversal
In the coming weeks, we will look for signs of seller fatigue and a stabilization in open interest. A crucial factor will be whether the US Dollar Index keeps rising, as ongoing dollar strength could continue to pressure risk assets. Any change in this macro trend could signal a chance for a reversal.
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by VT Markets
Aug 25, 2025
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