Bitcoin experienced substantial selling pressure on 26 August 2025, as 24,000 Bitcoins were rapidly sold. This action appeared to target aggressively driving the price down.
Following some recovery, Bitcoin’s value fell below US$110,000, marking a recent low. The move occurred alongside a broader shift back into the US dollar following losses tied to comments made by Powell.
Higher Volatility Expected
We are seeing this aggressive move below $110,000 as a clear signal for higher volatility in the coming weeks. The 30-day implied volatility has already spiked to over 70%, making options premiums much more expensive. This suggests traders are bracing for wider price swings than we have seen in recent months.
This price action has triggered a significant shift in the futures market, with over $500 million in long positions liquidated in just the past day. We are now observing funding rates on major exchanges turn negative, indicating a growing willingness to pay for short-side exposure. This points to a decidedly bearish sentiment taking hold among leveraged traders.
For those holding significant spot positions, now is the time to consider hedging strategies. Buying put options with strike prices around $100,000 or $95,000 can provide a floor against further downside. This is a prudent move given the strength of the US dollar following last week’s remarks from Powell at Jackson Hole.
The nature of this large, concentrated selling reminds us of the deleveraging events we witnessed back in 2022. During that time, similar forceful moves often preceded wider market liquidations and extended downturns. We should be cautious that this might not be an isolated event but the start of a larger positional unwind.
Opportunities For Reversal
Over the next few weeks, we will be watching for signs of seller exhaustion and a stabilization in open interest. A key factor will be whether the US Dollar Index continues its ascent, as persistent dollar strength could keep pressure on risk assets. Any shift in that macro trend could present an opportunity for a reversal.
