Is $105,000 the Make-or-Break Threshold for Bitcoin's Next Leg Higher?

Bitcoin's recent test of the $105,000 level in August 2025 has become a focal point for investors and analysts, as on-chain data and whale behavior signal a potential inflection point in the cryptocurrency's near-term trajectory. This price level, long regarded as a psychological and structural support, now faces a critical test amid a synchronized distribution phase, fragile bullish sentiment, and macroeconomic headwinds.

On-Chain Metrics: A Tale of Two Cohorts

The on-chain landscape reveals a stark divergence between short-term and long-term holders. Mid-sized wallets (10–100 BTC) have been active sellers, contributing to downward pressure as Bitcoin retreated from its August 13 peak of $124,474. However, smaller wallets (0–1 BTC) and mid-sized wallets (1–10 BTC) have shown resilience, with the latter accumulating around $107,000. This suggests that retail and institutional retail investors remain anchored to Bitcoin's long-term narrative, even as short-term volatility persists.

Realized price data further complicates the picture. Short-term holders are concentrated near recent highs, while longer-term holders are anchored closer to $90,000. This divergence creates a risk of capitulation if the price breaks below $105,000, with the next major support level estimated at $92,000–$89,000.

Whale Behavior: Fragility and Opportunity

Whale activity has been a double-edged sword. Large holders (1,000–10,000 BTC) have continued to distribute Bitcoin post-peak, though at a slower pace as the price retreated. The most critical group, however, is wallets holding 100–1,000 BTC, which have shown a balance between accumulation and distribution. This indecision underscores the psychological weight of the $105,000 level.

A notable event in early August—a $11 billion sale by a dormant whale account into Ether on Hyperliquid—sparked cascading liquidations and heightened volatility. Such moves highlight the outsized influence of large holders and the fragility of bullish sentiment. Meanwhile, a $45 million long position with a liquidation line at $105,000 adds further uncertainty to the price action at this level.

Macro and Seasonal Headwinds

Bitcoin's performance is also being tested by broader macroeconomic factors. The August to September period, historically dubbed the “ghost month” in Asian markets, has seen an average 21.7% decline in Bitcoin since 2017. This seasonal weakness is compounded by uncertainty around Federal Reserve policy and the waning momentum of spot ETF enthusiasm. Additionally, the BTC/EUR pair's failure to reach a new all-time high since early 2024 suggests the recent rally may be more attributable to a weakening U.S. dollar than organic demand.

Resilient Demand: A Silver Lining

Despite these bearish signals, demand indicators remain robust. Apparent demand metrics show the market absorbed 160,000 BTC in the past 30 days, with accumulator addresses (wallets that only buy and never sell) adding 50,000 BTC. These addresses are often seen as high-conviction signals, indicating long-term positioning remains intact.

Off-chain activity also offers optimism. Over-the-counter (OTC) desks are holding significantly less Bitcoin (145,000 BTC) compared to four years ago (550,000 BTC), suggesting large players are not offloading but instead accumulating or holding inventory. This contrasts with bear market patterns, where OTC desks typically increase holdings ahead of capitulation.

Investment Implications

For investors, the $105,000 level represents both a risk and an opportunity. A decisive break below this threshold could trigger widespread fear and a test of the $92,000–$89,000 support range. However, a successful defense of $105,000—coupled with continued accumulation by mid-sized and small wallets—could signal a resumption of the bull trend.

Strategic Considerations:
1. Position Sizing: Given the fragility of bullish sentiment, investors should consider reducing exposure to speculative positions and focusing on core holdings.
2. Hedging: Options strategies (e.g., protective puts) may be prudent to mitigate downside risk if the price approaches $105,000.
3. Long-Term Accumulation: For those with a multi-year horizon, dips near $90,000 could present buying opportunities, provided on-chain metrics show sustained accumulation.

In conclusion, the $105,000 level is more than a number—it is a barometer of market psychology and structural strength. While the near-term outlook remains uncertain, the interplay of on-chain resilience and whale behavior suggests that Bitcoin's long-term trajectory is not yet in jeopardy. Investors who can navigate the volatility and maintain a disciplined approach may find themselves well-positioned for the next leg higher.