Bitcoin News Today: Bitcoin's Fear Gauge Hits 4-Month High—Is This the Pre-Rebound Signal?

Bitcoin's recent pullback below $115,000 has raised concerns about the cryptocurrency’s bullish momentum, despite indicators suggesting the correction is temporary. Key metrics, including options skew, ETF flows, top trader positioning, and stablecoin demand, indicate that Bitcoin may soon reclaim the $120,000 level.

The Bitcoin options skew metric climbed to its highest point in four months, reaching levels that suggest heightened fear among market participants. In normal market conditions, the skew should move between -6% and +6%. However, when protective put options increase in demand, the indicator surges beyond this range, signaling bearish sentiment. Historical data shows that similar skew jumps have often been followed by strong price recoveries. For example, on August 5, a comparable skew jump was followed by a $9,657 rally within six days. Similarly, when Bitcoin hit $74,587 on April 9, the skew touched 13%, leading to a $11,474 rebound in four days. This pattern suggests that the current pullback may be a buying opportunity.

Despite fears of outflows from spot Bitcoin ETFs, the market appears resilient. Between July 31 and August 5, spot Bitcoin ETFs recorded $1.45 billion in net outflows, which led to a modest 6% correction to $112,000. These ETFs represent a $152 billion market, meaning small inflows or outflows over a short period should be considered normal. The last significant volatility event — a 12% price swing within 72 hours — occurred on April 7. This indicates that the market remains liquid enough to absorb ETF redemptions without triggering larger sell-offs.

Top traders at OKX and Binance have also shown little reaction to the recent price decline. The long-to-short ratio, which measures the proportion of long to short positions, has stabilized after a brief reduction in longs between Thursday and Friday. This suggests that professional traders are either waiting for a potential retest of $112,000 or remain confident in the asset’s long-term value. Some analysts argue that the hesitation to buy the dip at $115,000 could indicate caution, but it is equally possible that traders are strategically positioning themselves ahead of a rebound.

Stablecoin activity in China provides additional insight. Tether (USDT) currently trades at a 0.8% discount in China, indicating mild pressure to exit crypto markets. However, this figure has remained stable since Friday evening, suggesting that sentiment is not worsening. Strong retail-driven demand typically pushes stablecoins to trade at a 2% premium against the U.S. dollar. Thus, the current discount reflects caution but not panic.

The Binance Buying Power Ratio, another key indicator, has raised concerns among analysts. The ratio, which measures stablecoin inflows against Bitcoin outflows on Binance, recently plummeted to -0.81 within 48 hours, signaling weakened demand and higher correction risk. According to onchain analyst Crazzyblockk, the sharp drop confirms that Bitcoin’s primary fuel — liquidity — has been exhausted. The ratio had peaked at 2.01 on August 14, meaning for every $1 of BTC moving to cold storage, over $2 in stablecoins had entered the market. However, the sudden reversal suggests a shift in market sentiment.

Bitcoin’s price correction has led to speculation about the likelihood of further declines. Analysts like KillaXBT suggest that if Bitcoin avoids falling below $110,000, the next major resistance lies around $127,000. A strong breakout above that level could push BTC toward $140,000. However, the analyst also warned that a new all-time high in September may not guarantee sustained bullish momentum. At the current price of $114,988, BTC has seen a 2.4% drop in the past 24 hours.

Despite the recent dip, the Coinbase Premium Index — a measure of demand in the U.S. — has shown strength, indicating that demand for Bitcoin remains robust in key markets. The premium has returned to positive territory after a brief dip into negative territory, suggesting that U.S. investors are continuing to support the asset. However, some traders find the divergence between the premium and BTC’s price movement “strange,” with one suggesting it could indicate that large entities are accumulating Bitcoin discreetly.

The Federal Reserve’s upcoming Jackson Hole symposium on August 22 is expected to play a critical role in shaping market sentiment. With the Fed caught between rising inflation and a weakening labor market, any shift in policy could influence Bitcoin’s trajectory. Meanwhile, ongoing negotiations to end the Russia-Ukraine conflict could also introduce volatility, particularly if a peace deal is announced.

Overall, the data suggests that Bitcoin’s recent dip is not a sign of a long-term bear market but rather a correction within a broader bullish trend. While the market faces challenges, the combination of stable ETF flows, cautious trader positioning, and resilient retail demand points to a potential rebound. Investors are advised to monitor key metrics such as the Binance Buying Power Ratio and the Coinbase Premium Index to gauge the market’s direction in the coming weeks.

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[1] Was the Bitcoin price bottom $114.7K?: Data suggests it's... (https://cointelegraph.com/news/was-the-bitcoin-price-bottom-dollar114-7k-data-suggests-it-s-time-for-a-reversal)

[2] Bitcoin 'liquidity zones swept' but uptick in open interest... (https://cointelegraph.com/news/bitcoin-liquidity-zones-swept-but-uptick-in-open-interest-hints-at-btc-recovery)

[3] Dip buyers 'stopped the train,' 5 things to know in Bitcoin... (https://cointelegraph.com/news/dip-buyers-stopped-the-train-5-things-bitcoin-this-week)

[4] Bitcoin Falls Below $115000 As Binance Buying Power... (https://www.mitrade.com/au/insights/news/live-news/article-3-1050106-20250819)