Bitcoin's Bearish Signals and Critical Support Levels: Is a Major Sell-Off Imminent?

Bitcoin’s price action in August 2025 has painted a starkly bearish technical picture, with key indicators and patterns suggesting heightened vulnerability to further downside. The Relative Strength Index (RSI) has dipped below 50 on the weekly chart, signaling waning bullish momentum, while the Moving Average Convergence Divergence (MACD) has formed a bearish crossover, reinforcing the bearish narrative [3]. Price consolidation below the $107K–$108K range, coupled with sellers dominating the $107,400–$110,500 corridor, underscores the fragility of Bitcoin’s current structure [4].

A critical technical concern lies in the formation of an ascending wedge and a descending parallel channel—both bearish continuation patterns that historically precede significant corrections [3]. Immediate support levels at $107K, $108K, and the 200-day Simple Moving Average (SMA) around $101,306 are now under intense scrutiny. A breakdown below $107K could trigger a cascade toward $100K or even $97.5K, levels that would test the psychological and structural resilience of long-term holders [3].

On-chain metrics add further weight to the bearish case. The MVRV (Market Value to Realized Value) ratio has fallen below its 365-day SMA, indicating widespread undervaluation and potential capitulation from short-term holders [3]. Meanwhile, the 30-day MVRV rate of -3.37% highlights a prolonged period of underperformance, suggesting that Bitcoin’s current price may not yet reflect the full extent of macroeconomic pressures [3].

Macro risks amplify the technical fragility. A synchronized outflow of $2 billion from Bitcoin ETFs and $449 million from gold ETFs in August 2025 reflects investor uncertainty amid conflicting U.S. economic signals—rising core CPI and PPI inflation versus soft labor data [2]. The Federal Reserve’s ambiguous stance on a potential September rate cut has further destabilized sentiment, with Chair Jerome Powell’s mixed messaging creating a vacuum of confidence [2]. While a 25-basis-point cut in September 2025 has historically driven Bitcoin’s -0.65 inverse correlation to Fed rates, the asset’s market dominance has slipped to 59% as capital shifts to altcoins like Ethereum and Solana [1].

Geopolitical risks also loom large. Research indicates that country-specific geopolitical shocks have historically increased the crypto exchange rate premium, suggesting Bitcoin’s role as a capital flight medium [4]. However, global geopolitical acts (GPRA) have led to a persistent decline in this premium, reflecting heightened risk aversion and volatility during realized events [4].

The convergence of technical and macroeconomic factors points to a critical juncture. While institutional confidence and ETF inflows provide a floor, the immediate risk of a breakdown below $107K remains high. Strategic entry points for long-term investors may emerge if Bitcoin stabilizes near the 200-day SMA, but the path to $100K or $97.5K cannot be ruled out without a significant shift in sentiment or policy clarity.

**Source:[1] Bitcoin's Macroeconomic Crossroads: Resilience and [https://www.ainvest.com/news/bitcoin-macroeconomic-crossroads-resilience-vulnerability-q4-2025-2509][2] The Synchronized Flight from Bitcoin and Gold [https://www.ainvest.com/news/synchronized-flight-bitcoin-gold-harbinger-macro-uncertainty-2025-2509][3] Strategic Entry Points Below $107K Amid Correction [https://www.ainvest.com/news/bitcoin-critical-juncture-strategic-entry-points-107k-correction-2509][4] Geopolitical risks and crypto exchange rate premium [https://www.sciencedirect.com/science/article/abs/pii/S1544612325015417]