Bitcoin News Today: Bitcoin's Fragile Support Hides a Deepening Investor Paradox

Bitcoin (BTC/USD) traded above $113,000 amid a retest of a multi-year trendline, despite weak market sentiment and bearish technical indicators. The cryptocurrency dropped nearly 10% from its record high of $124,000, primarily due to insufficient new capital inflows and investor hesitancy to buy at current levels [1]. The recent price action reflects a broader shift in short-term positioning, with traders re-evaluating the outlook for further gains [1].

Glassnode On-Chain data indicates that the rate of capital inflows during this breakout is significantly lower than during previous all-time highs in March and December 2024 [1]. While the realized cap increased modestly by +6% per month, compared to the +13% monthly growth seen during earlier peaks, it suggests a lighter appetite among investors for further price appreciation [1]. This divergence from historical patterns has raised concerns about the sustainability of the current price level [1].

Another key metric, the short-term holder realized price (STH RP), provides insight into near-term market positioning. Bitcoin approached but held above the $108,600 level, which reflects the average acquisition price of coins moved within the past 155 days [1]. This level has historically acted as a support floor, and its resilience has been viewed as a bullish sign. The STH RP has continued to rise, indicating that new buyers are still entering the market, helping absorb selling pressure and maintain a positive long-term outlook [1].

From a technical perspective, Bitcoin has broken the long-term ascending trendline drawn from the April 2025 lows near $75,000 [1]. Analysts warn that this break could lead to a deeper retracement, with potential price targets at $98,200 and back to the $75,000 level [1]. On shorter timeframes, the four-hour chart shows a descending trendline in play, with Bitcoin testing key support levels. A failure to hold above the $112,353 daily low could trigger a retest of the $108,600 STH RP [1]. However, a successful rebound above this level could signal the start of a new bullish phase [1].

Market sentiment remains bearish, as evidenced by the latest OANDA client sentiment data, which shows 98% of traders are net-long on Bitcoin [1]. This extreme bullish sentiment typically precedes a correction, as contrarian traders often look for opportunities when the crowd is overly optimistic [1]. Additionally, Santiment reported that social sentiment has turned “ultra bearish,” with the Bitcoin Fear & Greed Index at 44 out of 100—its lowest level since late June [4]. This sharp shift in sentiment reflects growing anxiety among retail traders, particularly in light of recent market volatility and regulatory developments [4].

Corporate accumulation of Bitcoin, however, remains a positive structural trend. Over 297 public entities now collectively hold 3.67 million BTC, representing more than 17% of the total supply [5]. This institutional adoption provides a counterbalance to retail panic selling and reinforces the long-term investment thesis for Bitcoin [5]. Despite this, retail traders have shifted to bearish positions after the price dipped below $113,000, with Santiment noting a 180-degree turn in their trading behavior [4]. This retail-driven shift highlights the sensitivity of the market to short-term price fluctuations and the potential for further corrections [4].

Market analysts remain cautious ahead of the Federal Reserve's Jackson Hole speech, with expectations for a 2025 rate cut dropping from over 94% to 82% following recent inflation data [5]. The Fed's stance on monetary policy will be a key determinant for Bitcoin’s near-term trajectory, as lower interest rates typically favor risk-on assets [5]. Some analysts suggest that the current correction could mirror historical patterns seen in 2017 and 2021, where the market experienced sharp pullbacks before resuming its upward trend [4]. If this pattern repeats, Bitcoin could retest support levels as low as $90,000 before potentially recovering to new highs in 2025 [4].

Source:

[1] Bitcoin (BTC/USD) Price Outlook: Mixed Signals as Bearish Potential Grows (https://www.marketpulse.com/markets/bitcoin-btcusd-price-outlook-mixed-signals-as-bearish-potential-grows-108600-may-hold-the-key/)

[2] Bitcoin (BTC) Price Prediction: In Precarious Position (https://www.coindesk.com/markets/2025/08/18/btc-in-precarious-position-as-prices-penetrate-bullish-trendline)

[3] Bitcoin in Precarious Position as BTC Price Penetrates Bullish Trendline (https://finance.yahoo.com/news/bitcoin-precarious-position-btc-price-115104733.html)

[4] Bitcoin Corrects Below $113K As Retail Traders Panic Sell (https://cointelegraph.com/news/retail-flips-ultra-bearish-bitcoin-dips-113k-santiment)

[5] Bitcoin Dips Below $113K as Investors Await Powell Speech (https://bitbo.io/news/bitcoin-dips-powell-speech/)