Bitcoin’s $112K Defense: Next Support at $110K as Bearish Signals Mount
Aime Summary
Bitcoin has fallen to a four-week low as on-chain and technical indicators signal growing signs of market exhaustion, according to data from analytics firm Glassnode. The cryptocurrency trades at $112,967, having broken below key $114,500–$115,000 support levels. Exchange outflows reached $92.7 million in the past week, while the Spent Output Profit Ratio (SOPR) trended downward, reflecting diminishing profitability in on-chain transactions [1]. The breakdown has triggered over $400 million in liquidations, with price action targeting dense liquidity clusters around $112,000 [1].
Technical analysis underscores bearish momentum. Bitcoin’s 20-EMA crossed below the 50-EMA and converged with the 100-EMA, a pattern historically associated with bearish trends [1]. The Relative Strength Index (RSI) sits at 36, nearing oversold territory but lacking signs of a bullish reversal. Traders warn that failure to hold above $112,000 could expose support levels at $110,000 and $108,500 [1]. Meanwhile, the taker buy/sell ratio stands at -0.79, indicating stronger selling pressure [1].
On-chain flows further confirm weakening sentiment. Short-term holder (STH) realized price is $111,400, close to the current market level, raising risks of stop-loss selling [2]. Analyst Joao Wedson of Alphractal noted that Bitcoin’s Sharpe ratio is weaker than in 2024, signaling lower risk-adjusted returns and reduced institutional interest despite all-time highs [2]. Whales have sold 147,000 BTC in a month, accelerating downward pressure [4].
September has historically been a weak month for BitcoinBTC--, with week 38—the third worst historically—averaging a 2.25% return [3]. Deribit data shows a "max pain" level at $110,000, suggesting further downside risks. Perpetual funding rates for Bitcoin have dropped to 4%, one of the lowest in a month, indicating reduced speculative activity [3].
The Federal Reserve’s recent rate cut failed to spark a rally, with the U.S. Dollar Index (DXY) rebounding to 97.8 points. Historically, a stronger DXY has inverse correlations with Bitcoin, raising concerns about renewed bearish pressure [2]. Options markets also show bearish positioning, with a put/call volume ratio trending lower as traders lock in profits on in-the-money puts [6].
Analysts caution that the bull cycle may be entering a pause. 10x Research predicts Bitcoin could swing $20,000 in either direction during early Q4 2025, with critical support at $109,898 [4]. If buyers defend $112,000 and spot flows stabilize, a recovery toward $116,000 is possible. However, deeper corrections remain a risk if liquidity sweeps persist [1].
The market’s fragility is compounded by derivatives activity. Futures open interest fell sharply after Bitcoin broke below $113,000, and perpetual liquidation heatmaps highlight clusters between $111,500 and $110,000 [1]. Options open interest near record levels and peak gamma conditions amplify downside volatility, with dealers hedging aggressively on the bearish side [6].
Bitcoin’s trajectory now hinges on institutional demand and holder alignment. ETF inflows, once a key absorber of supply, have slowed, creating a fragile balance. Without renewed capital inflows or stabilization in on-chain metrics, the risk of deeper corrections remains elevated [6].
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