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Bitcoin (BTC/USD) found support today and bounced off a key area of support. The bounce comes as US Bitcoin and Ethereum ETFs face $1 billion in outflow.
The fundamentals at this stage seem to hint at further downside, will Bitcoin be able to defy the odds and continue its move higher?
Bitcoin ETF Flows
Even though investors recently pulled close to $1 billion out of the main Bitcoin and Ethereum investment funds as prices dropped, the total amount of money in all crypto funds is higher than ever. This shows that people are still hopeful about crypto, especially with new investment options coming soon.
Source: Farside Investors
According to Glassnode On-Chain data, Bitcoin's price went up to over $124,000, but it has since dropped by almost 10%. This is because not enough new money is being invested. Investors seem to think the price is too high and are less willing to buy now compared to previous times when the price hit a new record.
When we compare the current rate of capital inflows to the previous ATH breakouts, the realized cap has increased by a substantially smaller percentage than it did during the March and December ATHs in 2024. The initial $100k breakout in late-2024 saw the realized cap rate of increase hitting +13% per month, whilst the current environment peaked at a far more modest +6%/month.
This is a clear sign that investor appetite is clearly lighter at this stage.
Short-Term Holder Realized Price (STH RP)
Looking at another angle, Bitcoin came close to the 108600 level which is the short-term holder realized price (STH RP).
*The STH RP, which reflects the average acquisition price of coins moved within the past 155 days, is a key metric for gauging near-term investor positioning.
Even though Bitcoin's price is dropping right now, there are good signs underneath. There's a key price level, based on the average price paid by recent buyers, that usually acts as a "floor" during a strong market. Bitcoin has stayed above this floor all year. The most recent test in April marked the cycle low at $76,000, a move that coincided with market stress following the announcement of President Trump's new tariffs.
The fact that the average price people are paying for Bitcoin keeps rising shows that new investors are still confidently buying. This new money helps absorb the selling and keeps the long-term outlook positive.
Technical Analysis - BTC/USD
From a technical standpoint, there are conflicting views for Bitcoin as well.
Looking at the daily chart and Bitcoin has broken the long-term ascending trendline that has been in play since the April lows around 75000.
This trendline has held firm since then, and the break could lead to a bigger retracement with potential targets at 98200 and of course the 75000 handle.
Bitcoin (BTC/USD) Daily Chart, August 20, 2025
Source: TradingView.com (click to enlarge)
Dropping down to a four-hour chart and there is descending trendline in play.
Earlier in the day Bitcoin tested the trendline but has since retreated looking like it may test the daily low at 112353.
A break below this level could open up a retest of short-term holder realized price (STH RP) at 108600.
If this level holds, we could be in for a new bullish run but if this level gives way we could be in for a longer term retracement.
Bitcoin (BTC/USD) Four-Hour Chart, August 20, 2025
Source: TradingView.com (click to enlarge)
Client Sentiment Data - BTC/USD
Looking at OANDA client sentiment data, the majority of traders are long on Bitcoin with 98% of traders net-long. I prefer to take a contrarian view toward crowd sentiment, thus the fact that 98% of traders are net-long suggests a deeper pullback may be in play in the near-term.
