Bitcoin News Today: Bulls Face $116K Gauntlet as Bitcoin's Correction Tests Institutional Resolve

Bitcoin’s price has entered a consolidation phase after a significant correction from its record high of $124,000, trading near $115,000 as of August 20, 2025. The recent volatility has been attributed to a combination of profit-taking, leveraged position liquidations, and macroeconomic uncertainties tied to Federal Reserve policy. Analysts and market observers are closely monitoring whether the key support levels between $113,000 and $116,000 can hold, as this range is seen as critical for the next potential bullish resurgence.

Over the past week, Bitcoin has experienced a 7% decline from its peak, with over $1 billion in liquidations reported across the market, primarily affecting long positions. The drop has triggered a wave of profit-taking, particularly as Bitcoin’s Market Value to Realized Value (MVRV) ratio has reached 21%, indicating that most holders are still in profit. This has led to increased selling pressure as investors lock in gains following weeks of sharp price gains [1].

Technical indicators further highlight the uncertainty. Bitcoin’s Relative Strength Index (RSI) has entered the oversold territory for the first time in over a month, signaling a potential near-term rebound. However, daily chart analysis reveals bearish divergence, suggesting that selling pressure may continue in the short term [1]. The 50-day Exponential Moving Average (EMA) remains intact as a key support level, but a breakdown could trigger further declines toward the $112,000 level. The 200-day EMA, positioned near $103,000, represents a broader base for potential reaccumulation.

The U.S. Treasury’s recent policy shift has also played a role in the market’s dynamics. Treasury Secretary Scott Bessent clarified that the U.S. government will not directly purchase Bitcoin to expand its reserves, relying instead on assets confiscated from criminal activities. This policy removes a potential source of steady institutional demand and increases Bitcoin’s sensitivity to macroeconomic factors such as inflation and interest rates. Recent Producer Price Index (PPI) data, which showed stronger-than-expected inflation, has further pressured risk assets, including Bitcoin [1].

Institutional activity remains a key variable to watch. Despite the recent volatility, large whale activity has continued, with data indicating that significant Bitcoin holdings are being added during the pullback. Many of these investors are positioning ahead of the 2025 halving event, an occurrence that historically reduces mining supply and supports price cycles. Some analysts suggest that the halving, combined with growing institutional adoption and layer-2 solutions like the Lightning Network, could amplify Bitcoin’s long-term price potential [1].

Market sentiment is also shifting as the broader crypto ecosystem shows mixed signals. While Bitcoin’s dominance has dipped to 59% from over 65% earlier in the year, other major altcoins such as Ethereum, XRP, and Solana have shown strength. This shift in capital allocation reflects a broader risk appetite but also introduces potential volatility as market participants spread their bets. The Nasdaq’s performance mirrors the short-term weakness seen in Bitcoin, with 50% of the top 100 cryptocurrencies trading below their 50-day moving averages [1].

Looking ahead, the market’s trajectory will likely hinge on three key factors: clarity from the Federal Reserve’s upcoming Jackson Hole symposium, the extent of leverage unwinding, and the continued interest from institutional buyers. Most analysts view the current correction as a healthy consolidation rather than a structural bearish shift. However, the uncertainty surrounding Fed policy and the potential for further profit-taking suggest that the market may remain volatile in the near term [1].

Bitcoin’s path of least resistance remains uncertain, but the technical and macroeconomic factors point to a potential retest of key support levels before a new bullish phase could begin. If bulls successfully defend the $116,000 to $117,000 zone, the price could see a renewed push toward $120,000 and beyond. Conversely, a breakdown below $113,000 could extend the correction further, testing deeper levels near $110,000 [1].

Source:

[1] Bitcoin (BTC) Price Prediction: Can Bulls Defend $116K Key Support After $800M Liquidation Storm

https://coincentral.com/bitcoin-btc-price-prediction-can-bulls-defend-116k-key-support-after-800m-liquidation-storm/