Binance $1.5B Liquidations and Negative Funding Rates Hint at Market Bottom

Bitcoin (BTC) dropped sharply to the $112,000 level over the weekend, triggering more than $1.5 billion in liquidations on Binance, with negative funding rates signaling extreme bearish sentiment.

The latest sell-off, fueled by macroeconomic fears and ETF outflows, has left retail traders panic-selling near local lows, a pattern market watchers say often comes before a recovery.

Retail Panic Selling Meets Institutional Opportunism

According to CryptoQuant analyst Amr Taha, Bitcoin’s third consecutive Friday sell-off saw prices drop to about $112,000. In the process, it pushed Binance’s cumulative net taker volume, a measure of aggressive buying versus selling, to -$1.5 billion, its lowest point since July 25. This deep negative reading reflects a wave of forced liquidations and retail panic-selling, as BTC’s near-$7,000 plunge flushed out buyers.

“History often shows retail investors buying near tops and selling near bottoms,” Taha warned, highlighting a familiar behavioral pattern that may signal an imminent inflection.

Adding to the pressure, funding rates across major exchanges, including Binance and Deribit, flipped negative in late July, indicating an increase in short positioning. This retail-driven pessimism occurred around the same time broader macro headwinds started buffeting the market. QCP Capital noted in their latest assessment that weak U.S. jobs data, a fresh round of Trump-imposed tariffs, and the worst single-day spot ETF outflows since February had exacerbated risk-off sentiment.

Despite the turbulence, Bitcoin’s July monthly close marked a record high. According to QCP, options traders are already positioning for a rebound, with notable interest in BTC call spreads targeting $124,000 by late August, a level above the current all-time high.

Shakeout or Start of a Reversal?

As of press time, the number one cryptocurrency was trading at $114,396, up a rather modest 0.6% in 24 hours. And while the asset remains down 3.9% on the week, it has recovered from its weekly low, mirroring what QCP described as historical “shakeout” patterns that often precede fresh accumulation.

In comparison, Ethereum (ETH) has bounced from $3,400 to $3,550, while Solana (SOL) remains more than 15% lower on the week. However, altcoins such as XLM, ENA, and HASH are outpacing BTC with double-digit rebounds, lifting the total crypto market cap by $60 billion since Sunday.

Bitcoin’s near-term recovery is battling strong macro uncertainty, but the analysts at QCP insist that structural factors, including institutional adoption, regulatory clarity, and stablecoin growth, are underpinning its long-term outlook. They believe that if ETF inflows resume and funding rates normalize, current conditions could be remembered as a textbook “buy-the-dip” opportunity.

For now, all eyes remain on Bitcoin’s $115,000 resistance. A decisive break above it could shift sentiment from capitulation to cautious optimism.

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