Bitcoin Falls Below $116K as Crypto Stocks Drop Across the Board

Bitcoin dipped nearly 3% to $115,195.94 on Friday, a move that might seem minor but sent ripples through the crypto world, exposing just how interconnected its newer players—spot ETFs, leveraged corporations, and large-scale miners—have become.

The sector’s heavyweights felt the tremor: Coinbase Global slipped 1.28%, MicroStrategy’s Class A shares fell 2.12%, and miners took the hardest hits, with MARA Holdings down 3.04%, Riot Platforms off 2.83%, and Hut 8 Corp dropping 3.83%. Behind the red numbers on trading screens lies a deeper story of liquidity, leverage, and the evolving market structure that’s taken shape since Wall Street welcomed Bitcoin ETFs.

Face Sheet

Category	Details
Bitcoin Price (July 25, 2025)	$115,195.94 (-2.88% in 24h)
Key Causes of Drop	1. Whale Sell-Offs: Galaxy Digital sold 10,000 BTC ($1.18B), triggering liquidations ($152M longs). 2. Macro Headwinds: Risk-off sentiment, trade tensions, hawkish central banks. 3. Technical Weakness: Bearish RSI divergence, CME futures "gap" at $114K–$115K. 4. ETF/On-Chain: $131M BTC ETF outflows, $370M USDT withdrawn from exchanges. 5. Other: Miner profit-taking (3k BTC moved), regulatory jitters (EU stablecoin rules).
Crypto Equity Drops	- COIN: -1.28% (volume/sentiment-sensitive) - MSTR: -2.12% (BTC-levered balance sheet) - MARA: -3.04% (mining margins squeezed) - RIOT: -2.83% (similar to MARA) - HUT: -3.83% (highest BTC operating leverage)
Pros	- Healthy correction (leverage unwind). - Rising BTC dominance (altcoin rotation to safety). - Institutional resilience (ETF AUM $90B+, MicroStrategy buying). - Post-halving supply squeeze (225 BTC/day issuance).
Cons	- Amplified volatility (leverage, technical breaks). - Balance sheet risks (e.g., MSTR’s debt covenants). - Macro overhang (Fed hawkishness, strong USD). - Miner stress (hash-price down 18%, energy costs up). - ETF reflexivity risk (large redemptions could destabilize).
Sharp Commentary	- MSTR: "Leveraged bet on a leveraged asset" – 30% equity drop on 10% BTC move. - Miners: "Elastic leverage" – stocks amplify BTC volatility. - ETF Dominance: Liquidity cliffs grow as ETFs expand. - Whales: "Drive the bus" – $1B+ sales trigger panics.

What Sparked the Slide

Traders pinned the drop on a mix of familiar forces: hefty sales by big “whale” investors triggered a wave of leveraged liquidations, a technical breach of short-term support levels, and broader market pressures as rising real yields reshaped risk appetites. With $12.3 billion in Bitcoin options set to expire on July 26 and the “max pain” price hovering around $112,000, the market seemed almost magnetically pulled toward lower ground.

ETF flows, which can both cushion and amplify price swings, showed signs of strain. After steady inflows earlier this week, outflows briefly spiked before leveling off, suggesting institutional buyers are still interested below $115,000 but not blindly so. On-chain data also pointed to long-term holders cashing in profits, a group that typically rides out volatility but occasionally tempers rallies by selling into strength.

Miners Feel the Squeeze

Miners, caught in Bitcoin’s unforgiving math, bore the brunt of the downturn. Every $1,000 drop in Bitcoin’s price tightens their margins, especially after the recent halving slashed daily rewards and energy costs crept higher. Hut 8’s 3.83% plunge led the pack, a stark reminder that miners amplify Bitcoin’s volatility, carrying its downside risk plus their own operational and regulatory challenges.

Market chatter on Friday suggested miners might need to sell reserves, tap equity, or double down on diversifying into high-performance computing and AI hosting to steady their finances—a shift already gaining traction across the sector—unless Bitcoin claws back toward $120,000 soon.

MicroStrategy’s High-Stakes Bet

MicroStrategy, the software firm turned Bitcoin juggernaut, embodies the market’s wildest swings. With its balance sheet heavily tied to Bitcoin and fresh preferred stock issued to buy more, every $1,000 shift in the coin’s price can move the company’s net asset value by hundreds of millions. It’s a thrilling ride when prices climb—and a brutal one when they don’t. Critics call it a reckless gamble on an already volatile asset; fans see it as a bold play for institutions wary of direct crypto exposure. Both sides have a point, but they can’t both win on days like this.

Coinbase Weathers the Storm

Coinbase’s smaller 1.28% drop reflects its shifting role. While still tied to crypto’s ups and downs, its custody, derivatives, and institutional services provide some buffer that pure crypto plays lack. Still, if trading volumes dry up in a prolonged slump, the premium investors place on Coinbase’s growth could erode fast.

Testing the ETF Era

Friday’s dip doubled as a real-world test for the ETF-driven market. Spot Bitcoin funds have made trading easier and deepened liquidity, but they’ve also introduced a new risk: heavy redemptions could force issuers to sell Bitcoin into a market with no safety net. That dynamic cuts both ways—steady inflows can fuel sharp rallies, just as outflows can deepen declines.

Technical traders eyed a CME “gap” between $114,000 and $115,000 that seemed to pull prices lower, while bearish signals on the RSI hinted the June-July rally was losing steam. In derivatives, short-term volatility spiked above longer-term levels, a telltale sign of immediate stress that also creates opportunities for traders willing to bet on extreme moves.

What’s Next

The market’s path hinges on three forces: broader economic policy, ETF flows, and leverage. If central banks stick to a “higher for longer” stance on rates, rising yields could keep pressure on non-yielding assets like Bitcoin. Sustained ETF outflows—say, over $500 million daily—would signal fading institutional demand. And with $12.3 billion in options expiring Saturday, the market could reset next week with less leverage, setting the stage for a clearer move, up or down.

For now, $114,000–$115,000 is the line in the sand. A decisive break below could drag prices toward $108,000–$110,000. Holding steady might mean a bumpy summer range of $105,000–$125,000, spiked with sharp, options-fueled swings.

The Bigger Picture

At its core, Friday’s drop isn’t a crisis—it’s a reminder of how bull markets work. They shake out weak hands, test resolve, and teach newcomers that Bitcoin’s volatility is the price of admission. This cycle’s new players—pensions, sovereign funds, corporate treasurers—may handle the turbulence better than retail investors did in past crashes. Still, they’re learning a timeless lesson: when the world’s most famous digital asset twitches a few percent, everything built on it feels the jolt tenfold.

Investment Thesis

Category	Details
Macro Drivers	10-yr UST 4.40%, DXY 97.8—higher real rates pressure non-yielding assets (BTC, gold).
Flows	Spot ETF inflows resumed (+$226M) after 3-day outflow streak; demand persists below $115k.
Derivatives	$12.3B BTC options expire (max pain: $112k); dealer hedging drags spot lower.
On-Chain	Long-term holders taking profits above $120k; supply caps rallies.
Regulation	EU MiCA stablecoin backstop proposal risks EUR-denominated liquidity.
Technicals	- RSI bearish divergence (4H chart); daily close below 20-day Bollinger Band. - CME gap at $114k–$114.7k (80% fill likelihood). - Volatility backwardation: 1W IV at 64% vs. 3M at 53%.
Equity Knock-Ons	COIN (-1.5%): $390.8, custody moat. MSTR (-2.3%): 608k BTC; leveraged to BTC moves ($1k ≈ $608M NAV shift). MARA (-3.1%): High short interest (26%). RIOT (-3.2%): Energy cost risks. MicroStrategy math: Equity acts as leveraged BTC call due to $14B debt/preferred stack.
Key Opinion	1. Pullback driven by real rates, not structural collapse. 2. $115k is institutional bid zone; sub-$112k could trigger $500M+ inflows. 3. Miners fragile (hash-price down 18%, power costs up). 4. Prefer COIN over MSTR for lower tail risk. 5. Trade idea: Spot BTC + short 120k call/long 100k put (net carry -1.3%).
Forward Catalysts	26 Jul: Options expiry (65% chance $112k–$118k pin). 30 Jul FOMC: 80% hold rates; cuts could rally BTC. Aug–Sep: Thin liquidity → 8–10% swings. Q4: EU MiCA stress-test (50% chance).
Institutional Ideas	1. Long COIN/short MSTR (beta-neutral). 2. Sell 1W 105k puts to buy 1M 130k–140k call spread. 3. MSTR 9% preferred (yield 350bp over HY BB).
Bearish Triggers	1. ETF outflows >$500M/day. 2. Close below $103k (200-DMA). 3. 10-yr real yields >2.50% (current: 2.10%).

NOT INVESTMENT ADVICE