Bitcoin News Today: Bitcoin Buyers Battle at $110K as Euphoria Turns to Erosion

Bitcoin's price has dropped below $110,000, marking a significant correction from its all-time high of $124,500 in mid-August. The decline has sparked widespread market jitters, particularly as the cryptocurrency briefly dipped to a seven-week low of $107,400 on Saturday. This price drop has resulted in a net distribution phase, signaling a cooling off of the earlier "euphoric phase" that saw nearly 100% of Bitcoin's supply in profit, according to data from market intelligence firm Glassnode [1]. The firm noted that such euphoric phases are typically short-lived, requiring sustained capital inflows to counteract profit-taking. The current phase, which lasted 3.5 months, saw over 95% of supply in profit until August 19, when demand showed signs of exhaustion [1].

The drop in price also led to a sharp decline in the percentage of short-term holder supply in profit, which fell to 42% from above 90%, indicating a textbook market correction. However, a recent rebound to $112,000 has pushed more than 60% of short-term holders back into profit, though this remains fragile. Glassnode emphasized that a sustained recovery above $114,000–$116,000 would be necessary to attract new demand and fuel the next upward move [1]. The $112,000 level has become a critical resistance point, with the price failing to break through multiple times during the week. This resistance aligns with the 100-day and 50-day simple moving averages and is being actively defended by bearish market participants [1].

The broader cryptocurrency market also experienced a downturn, with ether (ETH) leading the decline and dropping nearly 4% within minutes of the release of weak U.S. nonfarm payrolls data. Bitcoin, while less affected, saw a significant dip under $111,000 amid rising expectations for a Federal Reserve rate cut. The U.S. labor market’s deteriorating conditions, evidenced by the much weaker-than-expected job additions of 22,000 in August, reinforced these expectations and triggered a shift in sentiment across asset classes [3]. The dollar weakened, and gold hit new record highs, while crypto markets saw increased selling pressure. The Chicago Mercantile Exchange's FedWatch tool indicated a rising probability of a 50 basis point rate cut, with the likelihood of a 25 basis point move dropping from near certainty to 86% [3].

The ETF landscape further amplified the selling pressure, with Ethereum and Bitcoin spot ETFs experiencing heavy outflows on September 5. Ethereum spot ETFs alone recorded $447 million in net withdrawals, marking the second-largest daily outflow in their history, while Bitcoin ETFs saw $160 million in outflows, with none of the twelve ETFs reporting inflows [4]. These outflows translated into immediate price pressure, with Bitcoin falling from $113,000 to $110,000 and Ethereum from $4,460 to $4,300. The sensitivity of crypto prices to ETF flows remains a key factor in market dynamics, with institutional investors withdrawing capital and adding direct selling pressure on the underlying assets [4].

Market analysts remain divided on the future trajectory of Bitcoin. Some suggest that a weekly close above $112,500 would confirm a lasting market bottom and potentially signal the start of a new bullish phase. Others caution that continued outflows and weak macroeconomic data could lead to further declines, with some analysts suggesting a potential drop toward $100,000 [2]. On-chain data indicates that liquidity is building, with stablecoin inflows into exchanges surging to over $2 billion ahead of the weak jobs report. This suggests that traders are preparing for a potential catalyst-driven move higher, though intraday volatility and early long liquidations have created short-term turbulence [5].

Bitcoin's four-year "repetition fractal cycle," as identified by crypto analytics firm Alphractal, has also drawn attention, with October expected to play a crucial role in shaping the next market phase. Historical patterns suggest that bearish momentum often builds in October, and the current 15% correction from all-time highs could be an early sign of a longer downtrend [6]. The descending channel on the hourly chart has pushed Bitcoin toward a critical support zone between $109,500 and $110,000, where buyers have stepped in to absorb selling pressure. However, if this level breaks, further declines toward $108,000 are possible, while a successful defense could lead to a retest of the $111,000–$112,000 resistance range [6].

Source: [1] Bitcoin's 'euphoric phase' cools as $112K becomes key... (https://cointelegraph.com/news/bitcoin-euphoric-phase-cools-112k-key-btc-price-level) [2] Bitcoin price ignores major US payrolls miss to erase... (https://cointelegraph.com/news/bitcoin-price-ignores-major-us-payrolls-miss-erase-113-4k-surge) [3] Ether Leads Crumbling Crypto Prices in Shocking Reversal... (https://www.coindesk.com/markets/2025/09/05/ether-leads-crumbling-crypto-prices-in-shocking-reversal-from-early-rally) [4] Ethereum and Bitcoin ETFs See Heavy Outflows, Prices Drop in Response (https://captainaltcoin.com/ethereum-and-bitcoin-etfs-see-heavy-outflows-prices-drop-in-response/) [5] Bitcoin breaks out, but weak US jobs data breaks bulls again (https://cointelegraph.com/news/bitcoin-breakout-fizzles-after-weak-us-jobs-data-raises-alarm) [6] If Bitcoin Price Collapses, How Low Will It Go? - Yahoo Finance (https://finance.yahoo.com/news/bitcoin-price-collapses-low-042138744.html)