Bitcoin News Today: Bitcoin's $114K Flash Highlighted a Market in Turmoil, Not Momentum

Bitcoin briefly surged to $114,000 amid a broader sell-off in both U.S. stocks and the cryptocurrency market, as traders grappled with profit-taking, leveraged positions unwinding, and uncertainty around Federal Reserve policy. The move was observed against a backdrop of heightened market stress, with data indicating over $100 million in long BTC positions liquidated within a single hour. This pressure was reflected in BTC/USD price action, which fell below $114,000, a key level analysts had previously highlighted as critical for bullish momentum. The Nasdaq Composite Index fell 1.2% at the time, mirroring broader market caution that extended into the crypto space.

Technical indicators underscored the vulnerability of Bitcoin's price. The 100-day simple moving average (SMA) at $110,950 emerged as a key support level, while the 50-day SMA at $115,875 was identified as a short-term barrier. Analysis from Material Indicators noted $25 million in bid liquidity stacked at $105,000—described as “plunge protection”—designed to stem further downward pressure. However, this liquidity, while potentially stabilizing in the short term, could fail to hold if market conditions deteriorated further.

On-chain data added nuance to the unfolding scenario. Glassnode highlighted a growing divergence between institutional demand and price action. Despite net outflows of $121 million in U.S. spot Bitcoin ETFs, particularly from BlackRock’s iShares Bitcoin Trust, institutional buyers were still seen as a potential stabilizing force if they continued absorbing selling pressure. This dynamic highlighted the complex interplay between macroeconomic fundamentals and speculative trading flows.

The broader cryptocurrency market also reflected signs of volatility. Bitcoin’s dominance in the market dipped to 59%, down from over 65% earlier in the year, signaling a rotation of capital into alternative cryptocurrencies like Ethereum, XRP, and Solana. While this diversification could indicate a healthy risk appetite, it also pointed to a lack of clear directional momentum for the broader market.

Market participants are now closely watching the Federal Reserve’s policy trajectory, particularly ahead of Chair Jerome Powell’s speech at the Jackson Hole symposium. Polymarket data showed odds of no September rate cut rising from 12% to 26%, as mixed inflation and employment data cast uncertainty over the timing of rate cuts. Lower interest rates typically support risk assets like Bitcoin by making them more attractive relative to traditional safe-haven assets. A delay in rate cuts could remove a key tailwind for crypto markets.

Analysts remain divided on Bitcoin’s near-term outlook. While some argue the current correction is part of a normal profit-taking cycle, others warn that overleveraged positions and thin order books increase the risk of deeper pullbacks. The 50 EMA has held as a psychological support, but a breakout below this level could shift sentiment decisively bearish. At the same time, historical patterns suggest Bitcoin has typically recovered from technical corrections, with long-term fundamentals still broadly bullish.

Source: [1] Bitcoin sell pressure 'palpable' as BTC bid support stacks at 105k (https://cointelegraph.com/news/bitcoin-sell-pressure-palpable-btc-bid-support-stacks-at-105k) [2] Bitcoin Price Is Going Down as Market Stress Tests Bulls Before Jackson Hole (https://www.financemagnates.com/trending/bitcoin-price-is-going-down-as-market-stress-tests-bulls-before-jackson-hole/)