Bitcoin News Today: Bitcoin Dips Below 120,000 as Policy Shifts Trigger 1 Billion in Liquidations

Bitcoin’s price dipped below $120,000 as shifting U.S. monetary policy signals caused ripples across financial markets, raising speculation about whether the pullback is a precursor to a stronger rally [1]. After touching a record high of $124,457 on August 13, BTC fell as low as $117,477 the following day before stabilizing near $119,000 [1]. The decline followed U.S. Treasury Secretary Scott Bessent’s remarks indicating the government would not acquire additional Bitcoin for strategic reserves, which triggered over $1 billion in leveraged liquidations [1].

On-chain metrics, however, suggest that the market may still be in a buildup phase for another bullish move. Exchange netflows have dropped to levels previously observed before major bull cycles in 2017 and 2021, indicating reduced selling pressure from long-term holders [1]. Short-term holders (STHs)—defined as addresses holding BTC for 155 days or less—have shown resilience by shifting toward accumulation rather than profit-taking [1]. The STH Spent Output Profit Ratio (SOPR) has rebounded above the neutral line, signaling that STHs are moving coins at a profit without triggering widespread selling, a development analysts view as a stabilizing force for the market [1].

The derivatives market has also shown signs of aggressive buying behavior. Over the past 24 hours, BTC saw $24.28 million in short liquidations compared to $17.16 million in long liquidations, while trading volume surged 65% to $149.47 billion [1]. Options volume increased by 128% to $9.43 billion, and the taker buy/sell ratio reached a monthly high of 1.16, reflecting strong demand from buyers [1]. Positive funding rates indicate traders are willing to pay premiums to hold long positions, suggesting confidence in the asset’s trajectory without over-leveraging [1].

Moreover, the NVT Golden Cross—a metric that measures network value relative to transaction volume—has sharply declined, a pattern that has historically preceded strong price rallies [1]. Analysts point to key price levels, with resistance at $122,190 and support near $115,892 [1]. A breakout above the resistance level could trigger a retest of the recent high near $124,457 [1].

Market observers remain cautious but optimistic, noting that the pullback may not signal a bearish trend but rather a consolidation phase ahead of a stronger move higher [1]. The broader market is also showing early signs of positioning for potential follow-through gains should Bitcoin stabilize and regain upward momentum [1].