Bitcoin News Today: Institutions Exit as Retail Drives Volatility, Bitcoin Tests Key Support

Bitcoin faces mounting downside risks in late August 2025 as market participants brace for potential volatility linked to Federal Reserve policy uncertainty, a widening CME gap, and increased retail positioning. The cryptocurrency has retreated from record highs above $124,000 to around $115,744, marking a 7% decline amid intensifying macroeconomic concerns and technical deterioration [3]. Analysts warn that the asset may test critical support levels below $106,666, with further declines toward $85,000 considered possible should the bull market support band fail [1].

The current correction follows a week of elevated selling pressure, with more than $500 million in long liquidations reported as Bitcoin dipped below key resistance levels. The forced unwinding of leveraged positions has amplified the downward momentum, contributing to a self-reinforcing cycle of selling. Institutional investors have also reduced exposure through ETF outflows, signaling risk-off behavior ahead of the Federal Reserve’s Jackson Hole symposium [3]. Meanwhile, retail traders remain active, maintaining positions in high-volatility narratives such as meme tokens and social coin launches [2].

Technical indicators underscore the bearish momentum, with Bitcoin breaking below the Bollinger Band midline and exhibiting widening downside volatility. The Moving Average Convergence Divergence (MACD) has turned negative, confirming a shift in momentum to the downside. These developments suggest that the recent decline is more than a short-term pullback and could lead to extended weakness unless a clear rebound is triggered by renewed buying pressure [3]. Market strategist Zen highlighted that without a deeper dip, any rebound near $116,000 is likely to stall before breaking higher [1].

A critical concern lies in the CME gap between $92,700 and $92,000. Analyst Egrag Crypto noted that if Bitcoin closes below the $106,666 bull market support band, the gap could become a focal point for price action in the coming weeks. A break below this level would increase the likelihood of a further decline toward $85,000. This scenario aligns with the "shooter candle" pattern observed in late 2024, which preceded a 31% decline [1]. Despite the bearish signals, the broader bull cycle remains intact, with many analysts expecting a sustainable rebound once the market clears key resistance levels.

The evolving market structure has also been shaped by the growing influence of institutional investors. With regulatory clarity and the approval of spot Bitcoin ETFs in 2025, institutional adoption has accelerated, shifting the focus of market dynamics. Unlike retail traders, institutions tend to favor low-volatility assets such as Layer 1 infrastructure and DeFi blue chips. Their investment strategies are less influenced by short-term sentiment and more aligned with long-term fundamentals. This has created a divergence between institutional and retail behaviors, with the former reducing exposure while the latter continues to drive activity in speculative assets [2].

As the market awaits Federal Reserve Chair Jerome Powell’s speech at Jackson Hole, uncertainty surrounding monetary policy remains a key factor. While markets are pricing in a September rate cut, conflicting signals around inflation and employment have created volatility. The outcome of Powell’s address could significantly impact Bitcoin’s trajectory, with hawkish surprises likely to extend the current correction. Analysts caution that any delay in rate cuts could exacerbate selling pressure, particularly if leveraged positions are further liquidated [3].

In summary, Bitcoin’s near-term outlook remains fragile as technical, macroeconomic, and structural factors align to increase downside risk. The cryptocurrency faces critical support levels below $106,666 and could test the $92,000 CME gap if the bull market band fails. Institutional outflows and leveraged liquidations have amplified the correction, while retail activity continues to influence high-volatility segments. With the Federal Reserve’s policy stance still uncertain, the market is bracing for further turbulence in the days ahead.

Source: [1] Bitcoin Price Faces $116k Bounce Talk but Analysts Warn of Deeper Risks (https://blockonomi.com/bitcoin-price-faces-116k-bounce-talk-but-analysts-warn-of-deeper-risks/) [2] Who's Really Driving the Crypto Market in 2025? (https://www.tokenmetrics.com/blog/from-retail-to-institutions-whos-driving-the-crypto-market-in-2025) [3] Bitcoin's 7% Plunge: How Jackson Hole Uncertainty And ... (https://blog.mexc.com/how-jackson-hole-uncertainty-and-macro-headwinds-triggered-august-2025s-market-correction)