Bitcoin Price Drops to $109K Amid Whale Sell-Off and Market Pressures

Bitcoin experienced a notable decline today, dropping from a high of $113,000 to a low of $109,000 before rebounding slightly to $110,000. This movement marked a 5% loss over the past week, catching many traders off guard in an otherwise upward trending market.

A significant factor in the drop stemmed from a major Bitcoin holder, known as a whale, who sold off about 24,000 BTC worth roughly $2.7 billion in a brief window. This action led to immediate panic selling and a rapid $4,000 plunge in price. Analysts identified this as the work of a single entity, which then shifted funds into Ethereum, boosting that asset while adding pressure to Bitcoin.

The whale still holds more than 152,000 BTC, raising concerns about potential future sales that could extend the downturn. Such large-scale moves by long-term holders often trigger algorithmic trading responses, especially during periods of lower liquidity like weekends. This created a chain reaction, amplifying the initial sell-off across the market.

Compounding the issue, the event sparked massive liquidations totaling over $845 million in the crypto space within 24 hours. Bitcoin’s bullish positions bore the brunt, with $310 million to $390 million in longs wiped out. This represented a 390% increase from recent liquidation levels, as prices fell below critical technical thresholds and activated automated sell orders.

High leverage in derivatives trading left the market exposed to these cascades, where overextended bets on rising prices fueled additional downward momentum. Traders who anticipated continued gains found themselves forced out, contributing to the surge in selling volume. The combination of these elements turned a single whale’s action into a broader market event.

Other Key Factors Driving the Decline

Bitcoin miners added to the supply pressure by transferring over 12,000 BTC to exchanges this week, the most since December 2024. On August 21, the net position change reached negative 5,066 BTC, indicating accelerated sales likely tied to higher operational costs following the recent halving. Past trends show that similar miner outflows have preceded price corrections, such as the 15% drop seen in early 2025.

U.S. spot Bitcoin ETFs also played a role, posting their largest weekly outflows since February at $1.5 billion. This shift suggested a pause in institutional buying after a period of strong inflows. BlackRock’s sale of $189 million in BTC stood out, prompting reactions from both retail and larger holders who began taking profits.

These ETF movements reduced the steady buying support that had driven Bitcoin’s recent rally, particularly after Federal Reserve Chair Jerome Powell’s comments on potential rate cuts at Jackson Hole. With combined ETF assets exceeding $166 billion, the outflows highlighted a moment of caution among investors. The lack of new positive drivers allowed existing pressures to dominate.

From a technical standpoint, Bitcoin breached important markers like the 50-day moving average around $112,400 and the $113,378 pivot point. This breakdown activated stop-loss orders and encouraged further selling based on chart patterns. The relative strength index dipped to about 41, pointing to bearish conditions, while widening Bollinger Bands indicated rising volatility.

After a 60-day upward streak fueled by dovish Fed signals, the fade in enthusiasm led to widespread profit realization. Market sentiment fell to 53, entering neutral territory from a slightly higher reading of 56. These signals reflected a dip in overall confidence among participants.

Broader economic elements influenced the sentiment, with uncertainties around Federal Reserve rate cut schedules and slight declines in stock indices like the Nasdaq and S&P 500. Bitcoin’s link to traditional risk assets meant it followed suit in this risk-averse environment. Seasonal patterns in August, often marked by choppy trading, along with funds rotating toward alternatives like Ethereum and Solana, diverted attention from Bitcoin.

Despite these short-term challenges, the decline seems tied more to market mechanics and temporary sentiment shifts than to core issues with Bitcoin’s value as an inflation hedge or alternative to fiat currencies. Analysts point to possible further dips toward $106,000 to $108,000 if current supports give way. However, renewed ETF interest or favorable economic updates could spark a recovery, keeping Bitcoin’s market dominance steady at around 60%.