Bitcoin News Today: Bitcoin's Crucial Divergence: Can $112K Spark a Bullish Turn?

Bitcoin's price trajectory is showing signs of potential reversal as technical indicators and market sentiment suggest a divergence between short-term bearish trends and long-term bullish expectations. Recent price action has seen Bitcoin dipping to critical support levels, with traders monitoring whether the $112,000 threshold will hold and potentially pave the way for a rebound toward higher levels. The Relative Strength Index (RSI) on shorter timeframes, including four-hour and six-hour charts, has entered oversold territory, accompanied by bullish divergence patterns. These signals, observed by analysts like Scott Melker, suggest that despite the current price correction, Bitcoin may be nearing a turning point in its bearish phase [6].

Options market dynamics also reflect a growing divergence in trader sentiment ahead of the August 29 options expiry, where $13.8 billion in Bitcoin options are set to settle. Open interest in call (buy) options stands at $7.44 billion, 17% higher than the $6.37 billion in put (sell) contracts. However, the actual price at which Bitcoin settles during expiry will determine the distribution of gains and losses across these positions. Deribit, the largest derivatives exchange with an 85% market share, dominates the options activity, followed by CME and OKX [3]. Traders who have positioned themselves with bullish strategies at higher strike prices face potential disappointment should the price remain below $114,000, where bearish pressure appears to be intensifying.

Market volatility is also being driven by broader macroeconomic factors, including the upcoming Jackson Hole symposium, where Federal Reserve Chair Jerome Powell is expected to address the central bank’s policy outlook. A dovish tone could signal a faster-than-expected path to interest rate cuts, potentially supporting Bitcoin and other risk assets. Conversely, a hawkish stance emphasizing inflationary risks could trigger renewed selling pressure, pushing Bitcoin further toward the $110,000 level [4]. The cryptocurrency’s beta to equities has also widened, with Bitcoin declining nearly 8.15% in a recent five-day period compared to a mere 1.35% drop in the Nasdaq futures index. This divergence implies a heightened sensitivity to macroeconomic shifts, with Bitcoin trading 5-7% below its theoretically beta-aligned value [2].

Institutional flows have further underscored this divergence. While Bitcoin ETFs have seen outflows for five consecutive days, totaling $194 million, Ethereum ETFs, particularly those managed by BlackRock, have attracted inflows of $288 million [1]. This shift in capital allocation favors Ethereum, reflecting a broader de-risking in the crypto market. However, Bitcoin’s price remains supported by key levels, with the most immediate support at $111.2K and deeper support between $109.4K and $107.6K [1]. Analysts like Anthony Pompliano argue that Bitcoin is now oversold and may be poised for a rebound as it approaches the seasonally strong end-of-year period [5].

Looking ahead, the cryptocurrency market remains underpinned by both short-term uncertainty and long-term optimism. Institutional adoption, whale accumulation, and regulatory developments are all factors that could influence Bitcoin’s trajectory. While some traders and analysts remain cautious, others are already positioning for a renewed bullish phase, with price targets ranging from $120,000 to as high as $1 million in the long term [3][7]. For now, Bitcoin’s fate may hinge on the outcome of the upcoming options expiry and the broader macroeconomic environment.

Source:

[1] ETF Divergence, Geopolitics, Options Re-pricing Weigh on BTC (https://www.blockhead.co/2025/08/22/etf-divergence-geopolitics-options-re-pricing-weigh-on-btc/)

[2] Bitcoin vs Equity Market Divergence - A Simple Beta Dislocation Analysis (https://members.delphidigital.io/feed/bitcoin-vs-equity-market-divergence-a-simple-beta-dislocation-analysis)

[3] Bitcoin Bull Market Hinges On $13.8 Billion Options Expiry (https://cointelegraph.com/news/bitcoin-s-13-8b-options-expiry-puts-bulls-on-edge-ahead-of-key-test)

[4] Bitcoin price rises ahead of Fed Jackson Hole speech (https://uk.finance.yahoo.com/news/bitcoin-price-crypto-federal-reserve-jackson-hole-085201361.html)

[5] Bitcoin Oversold as ETFs Post Biggest Outflow Streak in ... (https://cointelegraph.com/news/bitcoin-price-oversold-etfs-outflows-anthony-pompliano)

[6] Bitcoin at Crucial Point as RSI Signals Overbought Conditions (https://u.today/bitcoin-at-crucial-point-as-rsi-signals-overbought-conditions)

[7] Bitcoin Eyes $120K Surge After $112K Rebound (https://bravenewcoin.com/insights/bitcoin-btc-price-prediction-bitcoin-eyes-120k-surge-after-112k-rebound)