Why Is Bitcoin Dropping Despite Market Optimism

Bitcoin started the week on a bearish note after its Sunday rally stalled below $111,000, triggering a renewed downward move early Monday. The flagship cryptocurrency dropped sharply to just over $107,000, shedding nearly $4,000 within hours. The decline followed a mix of political headlines from the United States and heightened selling activity by long-term Bitcoin holders, or “OG wallets,” depositing large sums to centralized exchanges.

According to on-chain data provider Lookonchain, some of these early whale addresses transferred more than $1.48 billion worth of BTC to major exchanges over the past month. The activity coincided with a sell-off wave across the broader crypto market, reinforcing investor speculation that these deposits were part of planned liquidations after an extended period of price strength.

As a result, Ethereum fell below $3,800, losing over 3% daily, while other leading altcoins, BNB, XRP, Solana, Cardano, and Dogecoin, suffered deeper drops of more than 6%. Market data from CoinMarketCap indicates that the global crypto market cap slipped nearly 3% to around $3.61 trillion.

Trump’s comments add to market uncertainty

Beyond technical factors, political developments in the United States appear to have amplified market anxiety. President Donald Trump gave extended remarks over the weekend, describing the upcoming Supreme Court tariff case as “the most important in US history.” The case, scheduled to begin Wednesday, will test the limits of presidential authority in imposing tariffs, an issue central to Trump’s trade agenda.

He warned that restricting presidential tariff powers could lead to the “ruination of our nation” and vowed to defend his policies that he credits for strengthening U.S. economic growth and national security. Although he confirmed he will not attend the Supreme Court hearings, his rhetoric appeared to rattle investors already sensitive to macroeconomic and policy uncertainties.

Trump also commented on foreign policy flashpoints involving Nigeria and Venezuela, suggesting potential U.S. military action if violence and drug trafficking escalations continued. Analysts noted that his strong stance on multiple global fronts contributed to a risk-off sentiment across markets, with investors moving away from volatile assets, including cryptocurrencies.

Heavy whale activity and liquidation risks

In addition to political noise, technical signals point toward continued market stress. According to Coinglass data, if Bitcoin drops below $107,000, cumulative long liquidation intensity across major exchanges could reach $259 million. Conversely, a break above $109,000 could trigger short liquidations worth around $128 million.

Liquidation charts help traders gauge how concentrated leveraged positions might exacerbate price swings. When Bitcoin trades near these thresholds, a domino effect of forced liquidations can accelerate volatility, often resulting in rapid cascades either downward or upward.

BTC failed to hold the $110,500 resistance level and now trades below its 100-hour simple moving average. Currently, key resistance levels stand near $109,800 and $110,500, while support lies around $107,400 and $106,500. A sustained drop below $106,500 could expose BTC to further downside toward $104,200 or even $103,500.

The hourly MACD indicator is gaining momentum in the bearish zone, while the RSI (Relative Strength Index) remains below 50, suggesting that sellers continue to dominate short-term market dynamics.

Outlook: cautious sentiment prevails

Bitcoin remains relatively resilient compared to smaller altcoins but shows increasing susceptibility to external factors, both macroeconomic and geopolitical. As long as global uncertainties persist and large holders continue transferring coins onto exchanges, upward momentum will face significant resistance.

With high liquidation risk, strong whale activity, and ongoing political drama from Washington, traders are expected to remain cautious in the days leading to the Supreme Court tariff case.

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