Bitcoin News Today: Bitcoin tests $112K support amid short-term reversal signals

Bitcoin appears to have found temporary support near the $112,000 level, with some indicators suggesting the potential for a short-term reversal. Over the weekend, BTC dropped 1.88%, following a more aggressive decline of 4.5% in just two days earlier in the week. However, the price retested the $112,000 region and rose by 1.6% at the time of reporting, signaling early signs of buyer interest in that key support zone[1].

The liquidation heatmap from CoinGlass highlighted that the $112,000–$114,000 range had already seen significant selling pressure, indicating that the area may be a magnetic zone where traders are likely to accumulate. This was reinforced by historical data showing that in late June, Bitcoin similarly collected liquidity around $99,800 before rebounding instead of falling further toward $97,000[1]. While the liquidity to the north remains sparse, the $120,000 level is still viewed as a potential price target, assuming a local bottom has been formed[1].

On-chain metrics from Glassnode provided further support for a potential reversal. The spent output age bands showed that recent price movements were driven primarily by younger holdings—coins held for less than three months. This suggests that short-term holders are the ones driving the recent selling pressure, whereas medium-term holders (holding 3–12 months) did not show significant movement. This is a positive sign, as it indicates that the more stable segment of the market is not participating in the sell-off[1].

The fear and greed index also displayed a sharp decline at the beginning of August, similar to patterns observed in June when the index briefly hit fear territory before recovering. This pattern could be repeated, offering traders a chance to gauge sentiment shifts[1].

Despite these bullish signals, the 4-hour chart on TradingView still showed a bearish market structure, with low trading volume and volatility over the weekend. This suggests that the market may not yet be ready for a strong reversal. Price could potentially consolidate around $114,000 and continue its bearish trend into the week ahead[1].

In summary, while the liquidation heatmap and on-chain data suggest the possibility of a local bottom forming, traders should remain cautious. A successful push above $114,100 would be a key confirmation of a reversal. If buyers can hold that level and convert it into support, it would be the first strong indication of a bullish swing. However, another dip toward $110,000–$111,000 remains a risk, and traders are advised to monitor these levels closely[1].

Source: [1] Bitcoin finds support at $112K: Can buyers push BTC to $120K this week? (https://ambcrypto.com/btc-finds-support-at-112k-can-buyers-push-btc-to-120k-this-week/)