Bitcoin Traders Cautious After $114K Dip, But No Panic Yet

Key takeaways:

• BTC options signals caution but not an outright bearish market shift.

• Bitcoin ETF outflows and futures premiums show neutral-to-bearish sentiment, but no panic.

Bitcoin (BTC) fell to $114,013 on Friday, causing over $200 million in liquidations of leveraged bullish positions and hurting sentiment in BTC derivatives markets.

Investors appear to be losing confidence after three straight weeks of failing to hold prices above $120,000. But does this mean the bull run is over?

Under normal conditions, Bitcoin monthly futures trade at a 5% to 10% premium compared to spot prices to cover the longer settlement period. The current 6% premium is the lowest in four weeks, showing weaker demand for leveraged bullish positions.

While this is not strongly bearish, it signals reduced confidence despite high institutional demand.

Bitcoin can’t decouple from stocks amid tariff tensions

Bitcoin is trading only 7% below the $123,182 all‑time high from July 14, but gold remains near $3,350, unchanged from two weeks earlier. Many Bitcoin investors expected the “digital gold” asset to move independently as the global trade war escalated, yet the opposite happened.

After a short period in late June when Bitcoin moved differently from the S&P 500 index, the correlation between the two has climbed above 70% in the past three weeks. Instead of acting as “digital gold,” Bitcoin is now trading more like a high‑risk tech stock. This may also explain why its $2.3 trillion market value is close to that of Amazon or Google.

This shift is not necessarily negative. Investors’ views change over time, and global events such as US import tariff disputes and increases in the money supply affect every market. If traders think the job market is getting weaker, they often seek safety in cash and short‑term bonds.

Demand for the 1‑year US Treasury has reached its highest level in three months, with investors accepting lower yields. This happened as the US Bureau of Labor Statistics revised May and June job reports downward, while unemployment rose to 4.2% in July from 4.1% a month earlier.

Traders show less confidence in BTC above $114,000

To assess whether Bitcoin whales and market makers are reducing leveraged bullish positions or protecting against price declines, one…