Bitcoin News Today: Bitcoin's Critical Support Test: Will Bulls Hold or Trigger Deeper Collapse?

Bitcoin traders are increasingly signaling distress as the cryptocurrency's price slips below critical support levels, triggering a wave of selling pressure from both retail and institutional investors. On-chain data from platforms like CryptoQuant and Glassnode reveal that over 54,000 BTC-worth approximately $3.76 billion-were transferred to exchanges in a single day, marking one of the largest sell-offs since April 2025. This surge in activity underscores growing unease among short-term holders (STHs), who are liquidating positions to mitigate losses amid heightened volatility.

The selling frenzy has been exacerbated by macroeconomic uncertainties, including Trump's recent 100% tariff announcement on Chinese imports, which triggered a broader market selloff. Bitcoin's price plummeted to $102,000 from a peak of $124,500 earlier this month, erasing nearly $1 trillion in market capitalization. "The Exchange Whale Ratio has spiked above 0.70, indicating sustained selling pressure from large holders," noted CryptoQuant contributor Arab Chain. This metric, which tracks the proportion of large transactions relative to all exchange inflows, often signals a rapid decline when whales dominate outflows.

The impact of institutional investors has also been pronounced. U.S. spot Bitcoin ETFs recorded $812 million in outflows on August 1, the second-largest single-day drawdown on record. Ethereum ETFs fared worse, shedding $175 million as investors retreated from riskier assets. "The de-risking trend reflects broader macroeconomic concerns, including inflation and liquidity constraints," said pseudonymous trader Skew, who highlighted unusual weekend order-book activity indicative of large players offloading BTC.

Technical indicators further paint a bearish picture. Bitcoin is currently testing support between $112,000 and $113,000, a critical zone aligned with SuperTrend and an ascending trendline from April. However, the Relative Strength Index (RSI) stands at 42.99, below the neutral 50 threshold, while the MACD remains negative, signaling weak bullish momentum. Analysts warn that a daily close below $112,000 could target $108,000 next, with deeper support at $100,000–$104,000 looming. "If bulls fail to defend $112K, we could see a sharper correction," said Michael van de Poppe of MN Capital.

Short-term holders are particularly vulnerable. According to CryptoQuant, STHs sent over 40,000 BTC to exchanges at a loss on August 1-the highest single-day total since mid-July. With their realized price at $117,000, this cohort is now fully underwater, raising the risk of panic selling. "Emotional reactions from STHs could trigger a cascade of liquidations," warned Axel Adler, a CryptoQuant analyst.

The market's fragility is compounded by leveraged positions. Binance's futures insurance fund deployed $188 million to manage risks during the recent crash, while stablecoins like USDE and WBETH depegged on the exchange. Arthur Hayes of BitMEX noted that forced liquidations of cross-margin positions likely accelerated the downturn, wiping out 96% of futures traders and triggering a $19.16 billion liquidation event-the largest in crypto history.

Despite the turmoil, some analysts see potential for a rebound. The TimeValue indicator, which has historically signaled market bottoms, suggests the current correction could present strategic buying opportunities. "BTC remains above its 200-day SMA and STH cost basis, indicating the bull market isn't over," said a contributor to Coinotag. However, patience is key: "This phase resembles the March 2020 crash, where institutions quietly accumulated during the dip," noted a Coinpedia analyst.

As the market grapples with uncertainty, the coming weeks will be pivotal. A sustained break above $114,000 could rekindle bullish sentiment, while a prolonged slump below $112,000 may force a deeper correction. For now, Bitcoin traders are bracing for more volatility as they navigate a landscape marked by panic, profit-taking, and macroeconomic headwinds.

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