Bitcoin at Risk of Further Decline as Analyst Warns of "Hanging By A Thread" Situation

Bitcoin is "hanging by a thread" after falling below $112,000, according to analyst Ali. Technical and on-chain signals suggest further downside pressure. A support gap exists down to $108,000, with limited demand to absorb selling pressure in the zone between. Historically, open interest in futures has amplified declines when liquidations occur. Ethereum is expected to consolidate in the $110,000-$120,000 range over the next one to two weeks, with potential targets between $4,600 and $5,200.

Bitcoin and Ethereum, two of the world's leading cryptocurrencies, have shown significant market movements in recent weeks. Bitcoin, in particular, has experienced a notable decline, falling below $112,000, according to analyst Ali. This drop has raised concerns about further downside pressure, with technical and on-chain signals suggesting a support gap down to $108,000. The limited demand in this price range has made it challenging for the market to absorb selling pressure [1].

The recent decline in Bitcoin's price has been amplified by open interest in futures markets. Historically, when liquidations occur, the open interest in futures has been a significant driver of price declines. This dynamic has contributed to the current downward trend in Bitcoin's price.

Ethereum, on the other hand, is expected to consolidate in the $110,000 to $120,000 range over the next one to two weeks. The potential price targets for Ethereum are between $4,600 and $5,200. This consolidation period is likely to be influenced by both macroeconomic factors and institutional adoption. Ethereum's role as a digital reserve asset has been strengthened by significant institutional inflows, including over $1 billion in ETF inflows and the announcement of a $10 billion acquisition plan by ETHZilla [2].

The recent rally in Ethereum's price was driven by dovish remarks from U.S. Federal Reserve Chair Jerome Powell, which sparked a risk-on sentiment in the market. Powell's comments about the possibility of rate cuts in the near future led to a significant shift in investor sentiment, triggering a self-reinforcing price surge. The rally was also supported by strong technical indicators, with the RSI remaining elevated but not overbought, and the MACD trend remaining bullish [3].

Bitcoin, despite its recent decline, has seen growing institutional adoption. Many funds currently allocate about 1% of their portfolios to Bitcoin, and with regulatory clarity, these allocations could multiply. ETFs have also played a significant role in driving adoption, funneling large sums of capital into the asset. The limited supply of Bitcoin and growing institutional demand form the foundation of the $1 million case for Bitcoin's future price [1].

In conclusion, while Bitcoin faces significant challenges in the near term, its long-term prospects remain strong, driven by institutional adoption and regulatory progress. Ethereum, with its growing role as a digital reserve asset, is expected to consolidate in the $110,000 to $120,000 range, with potential targets between $4,600 and $5,200. Both cryptocurrencies continue to be compelling assets for long-term investors, despite the current market volatility.

References:
[1] https://coinpedia.org/news/coinbase-ceo-brian-armstrong-predicts-bitcoin-price-could-hit-1m-by-2030/
[2] https://www.ainvest.com/news/ethereum-news-today-ethereum-4-885-surge-fed-pivot-ignites-bull-run-2508/
[3] https://www.cnbc.com/2025/08/22/crypto-market-today.html