Bitcoin News Today: Bitcoin Hangs by a Thread at $112K—Will Long-Term Bulls Prevail?

Bitcoin fell below $110,000 for the first time since January 2025, triggering discussions among analysts about the next possible price action. The drop has raised concerns about the stability of key trendlines, including the 100 EMA on the daily chart, which is now acting as resistance rather than support. This technical breakdown has led some traders to anticipate a correction down to $103,000 or even $100,000. On-chain metrics, such as weakening trade volume and RSI divergences, further support the possibility of a deeper pullback. Analysts are closely monitoring the 100K–107K price range, which represents a critical support zone based on the intersection of the STH realized price and the 200-day SMA. Below this range, additional support is expected around $92,000–$93,000, where a significant portion of short-term holders have a cost basis. The recent price action also reflects a shift in market sentiment, with weaker hands capitulating while more seasoned investors remain unfazed. This dynamic has been supported by historical patterns, where Bitcoin’s pullbacks have often led to the transfer of assets from less committed holders to those with a stronger conviction in the market’s long-term potential.

In parallel, Bitcoin’s price fluctuations have led to significant liquidation events. Over the past few days, nearly $500 million in long positions has been liquidated, according to data from CoinGlass. This has prompted speculation that a short squeeze may occur if the price rebounds to the $114,000–$115,000 range, where a large wall of short liquidations could trigger a rally. Traders have observed that the downside liquidity has been largely exhausted, raising expectations that the market may soon shift from bearish to bullish momentum. This view is supported by the fact that the price has already cleared a significant portion of the short-side liquidity, potentially setting the stage for a rebound. Analysts suggest that if Bitcoin can reclaim the $112,600 level and maintain a close above it for at least four hours, the bearish momentum could reverse, opening the door to a potential move toward $115,000. This scenario has been highlighted by on-chain analysts, who argue that the current market structure is more favorable for a rally than a deeper correction.

The broader cryptocurrency market has also experienced notable movements, with XRP and Avalanche amplifying the downward trend. XRP dropped 1.70% as legal uncertainties continued to weigh on the market, while Avalanche fell 5.89% despite a strong DeFi ecosystem and institutional support. XRP’s technical indicators remain neutral, with RSI at 44 and Bollinger Bands tightening, suggesting a potential volatility explosion if a directional breakout occurs. Analysts have warned that a clear break below $3.10 could lead to a further decline toward $2.60–$2.00, while a rebound with volume above $3.10 could push the price toward $3.40. Avalanche, on the other hand, faces a more complex situation, as its price decline is accompanied by ongoing developments in the DeFi space and potential regulatory changes. Institutional investors and market participants are closely watching whether the price can stabilize around $23.24 or if further corrections will follow.

The market dominance of Bitcoin has remained relatively stable at 57.8%, despite the recent decline, but the broader altcoin market has shown signs of instability. The Altcoin Season Index, a tool that measures how altcoins perform relative to Bitcoin, currently stands at 50, indicating that the market is not in altcoin season. This is evidenced by the fact that only 50 of the top 100 cryptocurrencies by market cap have outperformed Bitcoin over the past 90 days. Notable performers include OKB, AERO, and CFX, while Ethereum, despite its strong fundamentals, has also experienced a drop. Analysts suggest that the current environment is more favorable for Bitcoin dominance, with altcoins struggling to maintain their momentum. This trend is expected to continue in the near term, particularly if Bitcoin can stabilize and begin a recovery, which could shift market focus back to the leading cryptocurrency.

Looking ahead, the market is closely watching for any signals that could indicate a potential reversal in Bitcoin’s downward trajectory. Key levels to monitor include the 20-week EMA at $108,000 and the 50-week EMA at $95,300, both of which have historically acted as dynamic support during prior bull market pullbacks. A rebound from the 20-week EMA could reinvigorate the market and put Bitcoin back on track to challenge its all-time high above $125,500. Conversely, a breakdown below the 50-week EMA could lead to a deeper correction, potentially testing the $95,300 level. Analysts remain divided on the likelihood of a short squeeze, with some suggesting that the market may be structurally healthier following the recent liquidation of overleveraged buyers. This view is supported by the fact that open interest has dropped significantly, indicating a reduction in leveraged long positions. Overall, the market is in a critical phase, with investors and traders closely monitoring technical indicators and on-chain data to determine the next major move in Bitcoin’s price action.

Source:

[1] Bitcoin drops under $109K: How low can BTC price go? (https://cointelegraph.com/news/bitcoin-drops-under-109k-how-low-can-btc-price-go-next)

[2] Was $124K the top? Bitcoin's price peak signals tell a different story (https://cointelegraph.com/news/was-124k-the-top-bitcoin-price-peak-signals-different-story)

[3] Bitcoin 'Hanging By A Thread' Around $112,000, Analyst Warns (https://finance.yahoo.com/news/bitcoin-hanging-thread-around-112-233122642.html)

[4] Bitcoin retreats slightly, XRP and Avalanche amplify the fall (https://www.cointribune.com/en/bitcoin-retreats-slightly-xrp-and-avalanche-amplify-the-fall/)

[5] Altcoin season index chart (https://www.bitgetapp.com/price/altcoin-season-index)

[6] Markets Brace for Jackson Hole: What's Next for EUR/USD? (https://www.investing.com/analysis/markets-brace-for-jackson-hole-whats-next-for-eurusd-200665738)

[7] Avalanche (AVAX) Price prediction (https://www.bitget.com/price/avalanche/price-prediction)