Bitcoin News Today: Bitcoin's bearish test: Will support hold as short-term sellers and Fed uncertainty loom?

Bitcoin dropped below $109,000 in recent trading, marking a continuation of its bearish momentum amid heightened market volatility. The price movement has sparked concerns among traders, who are closely monitoring key support and resistance levels as the market digests mixed signals from both technical indicators and macroeconomic factors. The broader cryptocurrency market, valued at nearly $3.92 trillion as of the latest estimates, has seen renewed activity, though Bitcoin’s upward trajectory remains under pressure from selling by short-term holders and declining institutional flows [1].

According to data from on-chain analytics platform Glassnode, Bitcoin faces significant resistance near $113,600, which corresponds to the average price paid by short-term holders over the past three months. Traders are anticipating potential selling pressure at this level as these investors look to break even or secure gains. Meanwhile, a breakdown below $108,000 could signal a deeper correction, with the 50-week simple moving average (SMA) between $92,000 and $98,000 historically marking the top of bearish cycles in 2017 and 2021 [1].

The bearish sentiment is further reinforced by declining inflows into Bitcoin ETFs. Over the past two weeks, institutional outflows have reached nearly $1.5 billion, with inflows dropping to just $81.4 million as of August 27. This trend contrasts sharply with the performance of Ethereum ETFs, where BlackRock alone injected $262.6 million on the same day, contributing to total inflows of over $307 million [1]. The shift in investor preference toward Ethereum highlights a broader reallocation of capital within the crypto market, potentially affecting Bitcoin’s near-term momentum.

Macroeconomic factors are also playing a key role in shaping market sentiment ahead of the Federal Reserve’s September meeting. The Fed’s stance on rate cuts remains a central concern for crypto traders, as easing monetary policy historically supports risk assets. However, recent hawkish comments from policymakers have introduced uncertainty, weighing on Bitcoin’s price and increasing volatility in the broader market [3]. Analysts note that if the Fed signals aggressive rate cuts, Bitcoin could regain strength and test higher levels, but a more cautious approach may exacerbate the current bearish trend.

Technical analysis of Bitcoin’s price action reveals further bearish signals. The asset has fallen below its 20-day moving average, a critical support level that had previously held the price in check. Momentum indicators such as the Relative Strength Index (RSI) show bearish divergence, suggesting sellers are gaining control. Traders are now closely watching the $108,000 level as the next critical support, with a break below this level potentially opening the door to a correction toward $102,000, aligning with the 50-day moving average [3].

Despite the short-term weakness, some analysts argue that the long-term bull case for Bitcoin remains intact. Year-to-date gains are still robust, and on-chain data shows that the majority of Bitcoin in circulation was acquired at much lower prices, suggesting that long-term holders remain confident in the asset’s trajectory. Additionally, the upcoming Bitcoin halving, expected later this year, could reinforce bullish sentiment by reducing the rate of new supply entering the market. Historical patterns suggest that halvings have preceded strong bull cycles, although no guarantees exist for future performance [3].

Looking ahead, the market’s focus will remain on the Fed’s policy direction, ETF inflow trends, and Bitcoin’s ability to defend key support levels. Institutional flows will be a critical factor in determining whether the market stabilizes or continues to trend downward. In the broader context, the cryptocurrency market is still evolving, with increasing institutional adoption reshaping market dynamics and investor behavior.

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[2] Will Bitcoin Price Drop Below $100K (https://www.bitget.com/news/detail/12560604935809)