Bitcoin News Today: Bitcoin Dips 9% in August as Analysts Warn of Market Trap

Bitcoin's recent price action in August has sparked concerns among traders and analysts that the month could be remembered as a significant trap in the cryptocurrency market. After hitting an all-time high above $124,000, Bitcoin quickly fell nearly 9%, raising questions about the sustainability of the current bull cycle and whether the market is losing momentum [1]. Analyst Miles Deutscher, commenting on the situation, suggested that August may mark a turning point, potentially masking the true direction of the market and catching investors off guard [2]. This volatility is seen as a warning sign, particularly for those who may have viewed the initial price surge as a continuation of a bullish trend [5].

The structural weakness in Bitcoin has been evident since early July, with signs of bearish pressure emerging as the price failed to maintain its momentum. On August 21, the price dropped to its lowest point in 17 days, absorbing heavy liquidity and triggering concern among traders [6]. This correction has led to a divided market, with some viewing the decline as a buying opportunity and others interpreting it as a red flag [7]. The uncertainty is further compounded by the growing influence of Ethereum and altcoins, which have outperformed Bitcoin in terms of both price and market narrative [1].

Deutscher outlined two potential scenarios for Bitcoin’s price trajectory following the correction. The first suggests a decline to around $111,000, which could align with a key support level for Ethereum at $4,000. The second scenario involves a retest of the mid-range at $115,500, which could pave the way for renewed upward momentum [1]. The market is currently waiting for clarity from upcoming macroeconomic events, particularly the Federal Reserve’s policy decisions, which are expected to play a crucial role in determining the next steps for Bitcoin [1].

The broader altcoin market has also experienced notable shifts during August. Unlike previous corrections, where altcoins suffered significant losses, the altcoin space this time has shown resilience, maintaining support and exhibiting bullish signals [1]. However, this strength has not been without its challenges. The altcoin market has also seen a strong decline since late June, forming a rounded top pattern that has raised concerns among traders [8]. The altcoin rally has been fueled by an estimated $27 billion in sidelined capital, which is now showing signs of movement into the decentralized asset token (DAT) ecosystem [1].

Ethereum’s relative strength has been another key factor. It has surpassed Bitcoin in terms of trading volume for treasury companies and has drawn increasing attention from institutional investors [1]. This trend suggests that Ethereum still has room to grow and may not be as saturated as Bitcoin in terms of institutional adoption [1]. However, Ethereum has also faced potential selloff pressures due to increased supply and distribution at key price levels, further complicating the market outlook [3].

Amid the volatility, macroeconomic factors have played a significant role. Uncertainty surrounding the Federal Reserve’s upcoming Jackson Hole speech has led to a wave of de-risking among investors, with hot Producer Price Index (PPI) data altering expectations around interest rate cuts [1]. This has heightened fears of a hawkish stance from the Fed, contributing to the recent sell-off in Bitcoin. Deutscher anticipates a "classic sell into the end of the month" pattern, which has historically been a feature of Bitcoin’s price behavior in September [1].

As of the end of August, Bitcoin was trading near $110,000, with investors divided on whether the correction has bottomed or if further declines are on the horizon. Analysts are closely monitoring key technical levels and on-chain metrics to determine the next potential direction of the market [9].

Source:

[1] https://www.newsbtc.com/bitcoin-news/why-august-could-be-remembered-as-a-major-trap-for-bitcoin-and-crypto-market/

[2] https://blockchain.news/flashnews/why-august-was-a-massive-trap-milesdeutscher-on-btc-altseason-and-the-2025-crypto-bull-market-outlook

[3] https://www.mitrade.com/insights/crypto-analysis/eth/fxstreet-ETHUSD-202508220929

[5] https://www.cointribune.com/en/bitcoin-starts-a-correction-after-its-all-time-high-technical-analysis-of-august-20-2025/

[6] https://www.facebook.com/manuel.guevarra.369210/posts/bitcoin-recently-plunged-below-113000-dollars-causing-a-shockwave-in-the-markets/751066624473215/

[7] https://investx.fr/en/crypto-news/bitcoin-heading-towards-110000-investment-opportunity-or-trap/

[8] https://www.tradingview.com/markets/cryptocurrencies/ideas/

[9] https://www.investing.com/analysis/bitcoin-bullish-enthusiasm-wanes-as-breakouts-fade-200665641