Bitcoin (BTC) is ranging in a key area of support and resistance, with several potential factors that may decide the price’s next moves. As of August, the most recent wallet cohorts aged 1-3 months are underwater.
Bitcoin is facing another potential pivotal moment, with the possibility of selling pressure. Based on Glassnode data, the most immediate pressure may come from the most recent cohorts of wallets, aged 1-3 months.
Those wallets are now underwater, and retail buyers may decide to sell at breakeven to await a more favorable buying moment. While the recent wallet cohorts bought well below the all-time peak, their cost basis is still relatively high compared to the recent price around $112,000.
Wallets aged 1-3 months were cautiously accumulating BTC since the April dip, though the short-term records increased their cost basis. Based on current prices, those wallets hold 8.82% of the total Bitcoin supply, potentially rivaling treasuries and ETFs.
However, a rally above the cost basis may be cut short, as traders try to cash in. There are still no signs of capitulation, though indicators show recent buyers are in distress.
Long-term holders with wallets aged over 1 year are holding strong, with only sporadic whale activity and selling. Even one whale could sway Bitcoin price lower, especially when whales are showing signs of rotating from BTC to ETH.
BTC is still above the potential capitulation price
Based on Glassnode tracking, Bitcoin sits above a support zone from accumulation at the end of 2024. Slightly older wallets have acquired BTC at the $93,000 to $110,000 range, which is seen as a potential support level.
At this range, accumulation came mostly from large-scale buyers and institutions , as retail stayed out of the market during the most recent rally.
BTC has not seen significant drawdowns during this market cycle, but traders and holders are more fearful of getting caught in a downturn.
Based on the Crypto Fear and Greed index, BTC sits at a neutral position, with no immediate signs of panic, but no overly exuberant long positions or risky leveraged trades.
Will Bitcoin retain its short-term trend?
At the current price range, the BTC bull market is not threatened. However, the weekly close is watched for signs of a trend reversal.
Based on CryptoQuant research, Bitcoin is now in a pivotal zone between $109,000 and $112,000. The weekly close may determine whether the price recovers further or shifts to a lower price range.
BTC also awaits the weekly options expiration event, which may cause additional volatility and selling. Overall, the leading coin has lost the narrative of being the engine of growth, as attention and accumulation shifted to ETH.
The BTC liquidation heatmap points to a similar range, with a slight shift between $111,000 and $114,000. However, more distributed long positions reach all the way down to $110,000, potentially triggering a series of liquidations for long positions.
For derivative markets, traders are more cautious in building up liquidity, causing relatively smaller crashes. In the past day, BTC saw limited liquidations of $16.6M for long positions and $24M for short positions. Open interest remains above $38B, though growing more cautiously. Hyperliquid whales are also more conservative, with fewer flashy positions.
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