Bitcoin price decline forecast: key resistance level at $114,000, market reacts lukewarm to US regulatory concerns.

The price of Bitcoin touched down at $109,000/coin on August 26, with an intraday fall of 1.08%. This decline was mainly due to massive selling by large Bitcoin holders and the chain reaction of market leverage liquidation.

Despite the dovish signals released by Fed Chairman Powell, Bitcoin's performance remains lackluster, and the market needs to regain key positions to restore a bullish outlook.

Market Dynamics: Whale Selling and Leverage Liquidations Trigger Chain Reactions

Last week, the Bitcoin market experienced significant fluctuations. The price surged to over $116,000 after Powell's speech, but then faced substantial selling pressure.

Over the weekend, an early whale dumped 24,000 BTC (worth about 2.6 billion USD), triggering a chain reaction in the market. This large-scale dumping sparked a wave of leverage liquidations, resulting in over 550 million USD in long positions being forced to close.

CoinGlass data shows that in the past 24 hours, the global cryptocurrency market experienced liquidation amounts exceeding 840 million USD, with over 166,000 individuals liquidated. Among them, the liquidation of long positions accounted for a significant portion, reaching 670 million USD.

Technical Analysis: Key Support and Resistance Levels Battle

From a technical analysis perspective, the $112,000 level has become a weak line of defense in the short term. If the price fails to stabilize above this area, it may confirm a bearish breakout and open up further downside potential.

Currently, Bitcoin is facing selling pressure between $116,500 and $118,000. A decisive breakthrough at $118,500 could trigger a rebound towards $123,000 and even the psychological barrier of $130,000.

In terms of support levels, $112,000 remains a key support level. If it fails, Bitcoin may correct down to the $108,000 area.

CoinGlass's 24-hour liquidation heatmap shows a significant concentration of buyer liquidity in the range of $110,500 to $109,700. These hot zones indicate that large buy orders may temporarily stabilize the price or become target areas for liquidity hunting.

Macroeconomic Factors: Federal Reserve Policies and Institutional Capital Flows

In his speech at Jackson Hole, Federal Reserve Chairman Powell emphasized the risks in the labor market and hinted that the Fed might cut interest rates in September. This dovish signal initially drove Bitcoin up, but the market subsequently retraced its gains.

Macroeconomic pressures, particularly inflation data and Federal Reserve policies, remain the main catalysts for Bitcoin's volatility. Historical data shows that Bitcoin typically experiences volatility after Powell's speech at Jackson Hole, followed by a strong rebound in the fourth quarter.

There has been a short-term reversal in institutional fund flows. According to CoinShares data, there was a net outflow of $1.43 billion from global cryptocurrency exchange-traded products (ETPs) last week.

Bitcoin was the first to be affected, as investors reduced their spot risk exposure after the asset failed to maintain the level of 116,000 USD reached a few days ago.

Long-term Forecast: Halving Effect and Industry Outlook

Despite short-term fluctuations, there remains strong confidence in the long-term prospects of Bitcoin. The halving event in 2025 will significantly reduce the issuance of Bitcoin, enhancing its supply scarcity.

Gate's 2025 prediction estimates that BTC will fluctuate between $103,000 and $133,000, with an average price of about $117,000. Some scenarios predict that with increased institutional participation, there may be a breakout by the end of the year, reaching above $150,000.

Analyst Leah Wald predicts that Bitcoin could reach $175,000 by the end of 2025, citing support from institutional giants. Galaxy Digital CEO Mike Novogratz emphasized that macroeconomic conditions are crucial for achieving these gains.

Investor Strategy: Risk Management and Position Allocation

In the current market environment, risk management is particularly important. Market analysts recommend closely monitoring trading volume and institutional fund flows. Considering dollar-cost averaging (DCA) may be an effective strategy to cope with a volatile environment.

For short-term traders, it is important to pay attention to whether Bitcoin can establish a base above $112,000. If it can regain the weekly opening price of $113,400, it may validate the reasonableness of further upward movement.

The sentiment in the options market remains cautious, with put options still having a 10% premium over call options. This indicates that investors are still maintaining a cautious attitude in the short term.

Long-term investors may view this pullback as an accumulation opportunity. Historical patterns indicate that after similar large-scale liquidation events, prices often find a bottom and then lay the foundation for recovery.

Future Outlook

Bitcoin price is hovering near the key support level of $114,000, as the market is digesting the impact of early whale selling and leverage liquidations.

Despite facing pressure in the short term, the long-term outlook remains bright. The 2025 halving event and continued institutional adoption will continue to provide support for the market.

Investors should pay attention to the game results at the key resistance level of $118,500 and the support level of $112,000, as this will be an important signal determining Bitcoin's next direction.

BTC-2.67%
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