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Bitcoin is on unstable ground right now, and things could swing either way. Just a few weeks ago, it soared to a new high of $123,000, but now it’s taken a drop to $113,000—erasing those recent gains and leaving a lot of investors feeling the pinch. According to the latest data from Glassnode, Bitcoin has dipped below a crucial support level, and it’s now caught in a risky zone between $110,000 and $116,000.
In Brief
Bitcoin buyers grabbed 120K BTC after the drop to $112K, but prices still face stiff resistance around the $116,900 mark.
Short-term holders’ profits fell to 70% and only 45% of coins are being sold in profit, showing growing caution and reduced confidence.
ETF outflows and lower futures funding rates show cooling trader sentiment and shrinking appetite for high-risk leveraged positions.
Opportunistic Buyers Step In
On-chain data from Glassnode indicates that investors responded quickly to the dip, according to the report. Around 120,000 BTC were acquired between July 31 and August 4. Prices bounced from the $112,000 low to above $114,000, showing visible buy-the-dip behavior. However, the supply in this range remains thin.
Consequently, Bitcoin must accumulate stronger support in the $110,000–$116,000 zone before any meaningful rally. The market remains hesitant. Prices haven’t yet broken back above the $116,900 resistance.
That resistance now marks the average cost basis for short-term holders who bought during the last month. A move above this point would indicate stronger demand and signal recovery. Until then, downside risk remains.
Short-Term Holders in Focus
Short-term holders (STH) are feeling the pinch. The percent of STH supply still in profit has dropped from 100% to 70%. While this is not yet alarming, further losses could dent investor confidence.
Besides, fewer STH coins are now being spent in profit. The proportion has cooled to 45%, falling below the neutral 50% threshold. This balance suggests investors are waiting. Neither panic selling nor FOMO buying is dominating for now.
Moreover, Bitcoin’s price still sits above the STH cost basis at $106,000. Historically, this level defines short-term bull and bear phases. Holding above it suggests the market remains in a healthy correction and not a breakdown.
ETF and Futures Markets Reflect Sentiment Shift
Traditional investment vehicles are also showing signs of caution. On August 5, Bitcoin ETFs recorded a significant outflow of 1,500 BTC. This was the biggest since April and signals potential institutional profit-taking. So far, such outflows have been short-lived. Still, they deserve close monitoring in case sentiment changes structurally.
In futures markets, the mood has also cooled. Funding rates across major perpetual swap markets have dropped below 0.1%. This shift shows traders are no longer eager to pay extra for leveraged long positions. Consequently, this marks a retreat from euphoria to caution.
Bitcoin is now in a delicate phase. While buyers are stepping in, resistance above remains strong. The market must hold above $110,000 to avoid deeper corrections. A move above $116,900 would flip sentiment bullish again.
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Peter is a skilled finance and crypto journalist who simplifies complex topics through clear writing, thorough research, and sharp industry insight, delivering reader-friendly content for today’s fast-moving digital world.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
