Bitcoin's Volatility Amid Key Support Levels: A Strategic Buy Opportunity?

Bitcoin’s recent price action has drawn intense scrutiny as it tests the $108,000 support level, a critical juncture for both short-term volatility and long-term positioning. On-chain analytics and macroeconomic factors suggest a pivotal moment for investors, but disciplined risk management remains paramount.

On-Chain Fundamentals: Accumulation and Weakness

The $104,000–$108,000 range has emerged as a key support zone, backed by sustained accumulation from both retail and institutional participants. UTXO (Unspent Transaction Output) activity reveals that the realized price has surpassed the 200-week moving average, a historical indicator of extended bull cycles [2]. Additionally, the Short-Term Holder MVRV ratio and SOPR (Spent Output Profit Ratio) metrics suggest ongoing, albeit modest, profit-taking, signaling that the market is not yet in a full bearish capitulation phase [3].

Order book depth in the $114,000–$118,000 range remains resilient, indicating strong hands absorbing supply at higher levels [2]. However, a breakdown below $108,000 could trigger further selling from short-term holders who have already experienced a 30% correction from Bitcoin’s all-time high [1]. This scenario would likely test the $105,000 level, which aligns with the 1–3 month holder realized price and has historically acted as a stabilizer during bearish environments [4].

Institutional and Macro Risks

The bearish pressure has been exacerbated by declining inflows into Bitcoin ETFs, with nearly $1.5 billion in outflows recorded over two weeks, while Ethereum ETFs have seen $307 million in inflows [1]. Whale selling has also played a major role, with a single whale offloading 24,000 BTC ($2.7 billion) over a weekend [4]. This large-scale selling has triggered liquidations, wiping out $528 million in leveraged positions in 24 hours [4].

Macro risks include the “ghost month” effect, a historical pattern where Bitcoin typically drops 21.7% during late August to early September [4], and Fed policy uncertainty. These factors, combined with the current bearish momentum—evidenced by Bitcoin trading below its 20-day moving average and an oversold RSI of 39.94 [3]—highlight the need for caution.

Strategic Entry Point or Trap?

Despite these risks, the $108,000 level could present a strategic entry point for long-term investors. If Bitcoin stabilizes near this level, it may attract renewed institutional interest, potentially propelling the price toward $145,000 based on historical patterns [4]. The upcoming 2028 halving event also adds a bullish catalyst, as reduced supply issuance historically coincides with price surges [4].

However, the market faces a “supply gap” in the $70K–$80K range, a legacy of the rapid price surge following Donald Trump’s 2024 election victory. This gap leaves minimal accumulation at those levels, increasing the risk of a deeper correction if the $108K support fails [1].

Risk Management: Position Sizing and Stop-Loss Strategies

For investors considering entry near $108,000, disciplined risk management is critical. Position sizing should reflect the high volatility, with allocations limited to a fraction of a portfolio. A stop-loss order below $105,000 could mitigate losses if the support breaks, while a take-profit target near $115,000 aligns with the potential for a relief rally [3].

Conclusion

Bitcoin’s volatility around $108,000 reflects a tug-of-war between accumulation and selling pressure. While on-chain metrics and institutional inflows suggest a potential floor, macroeconomic headwinds and structural risks demand a cautious approach. For long-term investors, this level could offer a compelling entry point—if paired with rigorous risk management.

**Source:[1] Bitcoin's bearish test: Will support hold as short-term sellers ... [https://www.ainvest.com/news/bitcoin-news-today-bitcoin-bearish-test-support-hold-short-term-sellers-fed-uncertainty-loom-2508/][2] Bitcoin On-Chain Model Shows Critical Support ... [https://www.mitrade.com/insights/news/live-news/article-3-1063943-20250823][3] Bitcoin Price Forecast for August 2025: Will BTC-USD Surge..., [https://www.tradingnews.com/news/bitcoin-price-forecast-target-of-133-usd-in-sight-as-support-holds-at-114-usd][4] Bitcoin's Critical $105K Support: A Strategic Buying ... [https://www.ainvest.com/news/bitcoin-critical-105k-support-strategic-buying-opportunity-short-term-weakness-2508/]