Bitcoin News: Bitcoin Eyes $116K Liquidity Zone as ETF Flows Signal Institutional Sentiment Shift

Key Takeaways:Bitcoin targets $116,000 as bulls test key resistance after weekend recovery.Strong buy support is seen near $112K–$110K if price corrects.Spot Bitcoin ETF flows and declining leverage may determine next market direction.ETF outflows hit $812M Friday, but traders look for renewed inflows this week.Bitcoin (BTC) is hovering near $116,000 as traders focus on a key liquidity wall amid growing anticipation of a bullish reversal. Exchange order book data and ETF netflows suggest the market is at a critical juncture, with both upside and downside liquidity zones in play.Bitcoin Price Tests Resistance at $116KBitcoin rebounded from weekend lows and traded at $115,732 on Bitstamp as of Monday's U.S. market open. Analysts are eyeing the $116K level as the next major target, coinciding with a CME futures gap filled over the weekend.“After completely filling the Daily CME Gap, Bitcoin will now try to exit this gap in an effort to reclaim levels above,” said market analyst Rekt Capital.Order book data from CoinGlass revealed a dense wall of sell orders around $115,800–$116,000, suggesting this level may be a near-term ceiling unless broken with strong momentum.Support Zones at $112K and BelowBuy-side liquidity remains strong, with bids stacked between $113,800 and $112,000, and additional interest near the old all-time high of $110,000.“$BTC above $115,850 will confirm that the $112k area was likely the bottom,” noted trader BigMike7335, highlighting key Fibonacci support levels.“If downside gets swept first — expect a bounce near $110.5K,” added trader Cipher X, suggesting that any pullback could be short-lived.ETF Netflows, Leverage Reset Key to DirectionCrypto trading firm QCP Capital said in a note that Bitcoin’s correction appears “more corrective than capitulatory,” following its highest monthly close on record in July.“Historically, such post-rally shakeouts, particularly those that flush out excess leverage, have laid the groundwork for renewed accumulation,” QCP noted.According to CoinGlass, Bitcoin futures open interest dropped to its lowest since July 10, signaling that a major leverage reset may be complete.Still, ETF sentiment remains mixed. Friday saw $812 million in net outflows from U.S. spot Bitcoin ETFs — the second-largest daily outflow on record. However, traders are closely watching Monday’s and Tuesday’s netflows for signs of institutional reaccumulation.“Spot levels near $112K warrant vigilance, especially amid persistent macro uncertainty,” QCP added. “But signs of stabilization, such as renewed spot ETF inflows, declining implied vols and narrowing skew, would be constructive.”Liquidity Compression Sets Up for BreakoutBitcoin's current range between $112K and $116K is compressing liquidity, with ETF flows and macro conditions likely to determine the breakout direction.While July’s Fed policy dampened sentiment temporarily, the cooling U.S. labor market and rising expectations of a September rate cut may reignite institutional buying if macro headwinds subside, according to Cointelegraph.