Sell-off September Strikes Bitcoin, Lifting Risk For New Low

Key takeaways:

• Bitcoin dipped below $111,500, testing a major daily demand zone.

• Spot demand remains strong, keeping the market structure broadly in favor of bulls.

• Price levels around $113,000, $107,200, and $100,000 could pique investors’ interest.

Bitcoin (BTC) dipped below $111,500 during the Asian market session on Monday, clearing out internal liquidity between $115,000 and $114,000 and testing a daily demand zone between $110,700 and $113,200. The dip places BTC at risk of losing support from the 50-day exponential moving average if its daily candle closes under $113,200.

Cointelegraph highlighted the likelihood of this retest last week, projecting a dip under $113,000 before renewed upside. A short-lived bullish reaction to the Federal Reserve’s interest rate cut on Wednesday lifted BTC to $117,500, but the rally failed to create a bullish break of structure, leading to the current correction.

Despite the downside move, the market structure remains broadly constructive. CryptoQuant data implied investors were buying aggressively into the dip, with the Coinbase Premium Index strongly positive. This indicated that US spot demand was providing a cushion against deeper downside pressure.

On-chain data supports this narrative. Bitcoin researcher Axel Adler Jr. noted that spot demand has remained consistent over the past month, with apparent demand totaling 95,800 BTC. Sustained accumulation is keeping price action near the upper band of the recent range, even as futures markets show short-term weakness.

Additionally, close to $280 million in BTC futures positions were liquidated during the correction, flushing out leverage that had built during BTC’s climb to $117,500 from $107,000 in September. With an excessive leverage reset, the market may be primed for a healthier continuation if spot demand persists.

Related: Bitcoin shows signs of ‘cycle exhaustion’ as BTC price tumbles to $112K

Key Bitcoin price levels to watch

With Bitcoin currently trading just under $113,000, three critical price levels stand 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 drawdown was a leverage flush, clearing excess speculative positions. 

Crypto analyst Dom noted that futures markets witnessed one of the largest long liquidations in recent months, with nearly 80% concentrated on Bybit. Such events often reset market conditions, leaving room for a cleaner move higher. A swift recovery from this zone could propel BTC back above $117,000 in the short term.

If the recovery is slow, Bitcoin may instead drift toward external liquidity or support around $107,200. BTC has repeatedly moved between higher time frame range highs and lows before resuming broader trends in 2025. More than $3 billion in long positions remained exposed at this level, raising the possibility of a deep liquidity grab before a bullish reversal. 

From a seasonality perspective, September has historically leaned bearish, making this scenario plausible as a short-term shakeout before stronger upside momentum into Q4.

The third and most bearish outcome would be a prolonged breakdown below $107,200, potentially extending toward $100,000. This would mark a structural shift toward bearish market conditions, with consolidation at lower levels signaling exhaustion of the current cycle. 

Supporting this risk, Glassnode highlighted that the short-term holder cost basis sits near $111,400. Sustained trading below this “battle line” between bulls and bears could cement a transition to mid- to long-term bearish structure.

Related: Biggest long liquidation of the year: 5 things to know in Bitcoin this week

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.