Bitcoin’s Imminent $110K–$112K Test: A High-Probability Breakout Setup for Aggressive Bullish Entry

Bitcoin’s price action in late 2025 has crystallized a high-probability breakout setup centered on the $110K–$112K range. This critical zone, reinforced by technical, institutional, and on-chain signals, represents a pivotal inflection point for the asset’s next leg higher.

Technical Foundations: A Bullish Convergence

The $110K–$112K range has emerged as a dynamic battleground where buyers have repeatedly intervened to stave off bearish momentum. A bullish pin bar on the monthly chart—a rare signal in a multi-year uptrend—suggests institutional confidence in this level as a floor [3]. The RSI, currently at 38.62, is poised to rebound from oversold territory, while the 200-day SMA at $112K acts as a psychological and technical anchor [1].

Chart patterns further validate the setup. Bitcoin’s consolidation within a $108K–$115K volatility channel has created a symmetrical triangle, with the upper boundary targeting $120K. A breakout above $112K would invalidate the bearish case and trigger a rally toward $123K–$128K [1]. Crucially, the 4-hour RSI has shown a bullish divergence, indicating short-term volatility may favor buyers despite daily bearish momentum [1].

Institutional Sentiment: Accumulation Amid Volatility

Institutional demand has remained resilient despite recent turbulence. U.S. spot Bitcoin ETFs, including BlackRock’s IBIT and Fidelity’s FBTC, have added $219 million and $15 million in inflows, respectively, since August 2025 [3]. These flows counterbalance retail outflows and whale-driven selloffs, such as the $2.7 billion dump that briefly pushed Bitcoin below $110K [2].

Corporate treasuries like MicroStrategy and Metaplanet have capitalized on dips to accumulate, with MicroStrategy alone adding $357 million in Bitcoin [2]. Meanwhile, Harvard University’s $120 million allocation to the iShares Bitcoin Trust (IBIT) underscores growing institutional adoption [1]. On-chain metrics like the NVT ratio (1.51) and VDD Multiple in the “green zone” confirm that Bitcoin’s valuation is increasingly driven by utility and macroeconomic fundamentals rather than speculative fervor [1].

On-Chain Validation: MVRV Compression and Whale Dynamics

Bitcoin’s MVRV ratio has compressed to the neutral 1.0 zone, signaling a rebalancing phase between speculative and long-term investor sentiment [1]. This compression mirrors historical inflection points in 2017 and 2021, where institutional buyers stepped in to absorb discounted supply. The 5% increase in “Over 8 Years” UTXO age further reinforces long-term holder conviction [1].

Whale activity has been a double-edged sword. While the $2.7 billion selloff triggered liquidations, institutional buyers have absorbed the resulting volatility. Galaxy Digital’s 1,167 BTC sale highlights strategic profit-taking, but the broader trend remains one of accumulation [2]. The 23.07% of Bitcoin supply controlled by large holders suggests a concentrated market structure, where institutional actions will dictate short-term direction [3].

Strategic Entry and Risk Management

For aggressive bullish entry, investors should focus on strategic dollar-cost-averaging near $111.9K and high-conviction buys below $100K [3]. Hedging via options or derivatives is prudent given the $232 million in liquidations observed during recent dips [4]. A weekly close above $114K would reignite bullish momentum, while a breakdown below $107K could trigger deeper corrections [2].

The Bitcoin Bull Score at 20—a historically bearish level—underscores the need for caution. However, the alignment of technical, institutional, and on-chain signals suggests the current consolidation is a temporary pause rather than a bearish reversal [1]. Historical backtesting of RSI-oversold entries (holding 30 days) since 2022 reveals a Sharpe ratio near 0.9, indicating reasonable risk-adjusted returns for a single-factor strategy, albeit with significant drawdowns typical of crypto markets [5].

Conclusion

Bitcoin’s $110K–$112K test is not merely a technical level but a convergence of market forces. Institutional accumulation, ETF inflows, and on-chain rebalancing create a high-probability scenario for a breakout. Investors who recognize this setup now may position themselves to capitalize on the next phase of Bitcoin’s bull cycle.

Source:
[1] Bitcoin's MVRV Compression and Market Consolidation [https://www.ainvest.com/news/bitcoin-mvrv-compression-market-consolidation-strategic-entry-points-bullish-cycle-pause-2508/]
[2] Bitcoin's Divergence Dilemma: Is $125K Still in Reach or ... [https://www.ainvest.com/news/bitcoin-divergence-dilemma-125k-reach-bull-run-peaked-2508/]
[3] Bitcoin's $108K–$115K Consolidation: A Strategic Entry Point for Late 2025 Investors [https://www.ainvest.com/news/bitcoin-108k-115k-consolidation-strategic-entry-point-late-2025-investors-2508/]
[4] BTC Fails $112K Support, Investors Shift to Bitcoin Hyper for Better ROI [https://icobench.com/news/bitcoin-price-prediction-btc-fails-112k-support-investors-shift-to-bitcoin-hyper-for-better-roi/]
[5] RSI-Oversold 30-Day Holding Strategy Performance (2022–2025) [https://www.backtestdata.com/crypto/rsi-oversold-30-day-holding-bitcoin-2022-2025/]
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