Bitcoin is facing a critical juncture, with its price consolidating around the pivotal $110,000 level amid conflicting market signals and mounting macroeconomic pressures.
After a brief rally above $117,000 following dovish comments from the US Federal Reserve, the crypto asset has slipped by 4% in a week, putting a planned weekly rebound in jeopardy. The recent price drop was triggered by a massive whale dump that led to over $550 million in liquidations, exploiting thin weekend liquidity.
As traders enter September, a historically weak month for Bitcoin, the market is navigating a complex web of technical indicators, on-chain data, and global economic factors that will dictate the next move. If you wonder how this outlook will hold for the coming months, you can check out our currency calendar here[1].
Technical Outlook: Bitcoin At $110K
Bitcoin’s price action shows a fierce battle between bulls and bears around the $110,000 support level.
The current level is a pivotal area of consolidation. A failure to hold this support could quickly open the path toward the $100,000–$105,000 range. The critical support zone is reinforced by the 200-day moving average, making it a crucial test for bulls.
A daily close above $112,000 is needed to regain momentum towards the next resistance band. Reclaiming the 50-day moving average, currently around $116,000, could signal a short-term reversal.
While September has a “brutal track record,” with Bitcoin logging negative returns in 8 of the past 12 years, some analysts see parallels to 2017. In that year, Bitcoin rallied strongly after August weakness, and optimists hope for a similar pattern this cycle.
Conflicting On-Chain Signals
On-chain data reveals a mixed picture of institutional and large-investor behavior, contributing to market uncertainty.
- Whale Accumulation vs. ETF Outflows: A remarkable trend shows a record high in the number of whale addresses holding over 100 BTC, indicating strong accumulation among sophisticated investors. However, this contrasts with a net outflow of $751 million from US-listed spot Bitcoin ETFs during August, suggesting caution or profit-taking among other institutional players. This divergence points to differing risk appetites and time horizons among large holders.
- MVRV ‘Death Cross’: CryptoQuant analyst Yonsei_dent flagged a bearish “death cross” in Bitcoin’s Market Value to Realized Value (MVRV) momentum indicator. Historically linked to cycle tops, this signal suggests capital inflows are weakening despite Bitcoin’s impressive rally to new all-time highs in August.
Bitcoin At $110K: Macro Pressures and Global Liquidity
The broader macroeconomic environment continues to weigh on Bitcoin’s price, with shifting central bank policies and global liquidity acting as key variables.
Following dovish comments from Fed Chair Jerome Powell, traders initially hoped for a less restrictive monetary policy. However, the continued elusive “Goldilocks” macro conditions, coupled with persistent inflation concerns, leave the Fed’s next move uncertain and could dictate Bitcoin’s direction. Historically, Bitcoin’s price cycles have been closely tied to the Fed’s liquidity environment.
Conversely, a weaker US Dollar Index (DXY) could provide a macro tailwind for Bitcoin, as has been observed historically. Growing geopolitical risk and persistent fiscal deficits in developed economies also enhance Bitcoin’s appeal as a hedge against fiat devaluation and financial instability.
Key Price Levels and Catalysts to Watch
Bitcoin’s path hinges on its ability to hold key support levels and attract institutional capital back into spot ETFs.
Holding $110K
A successful defense of the $110,000 level would be a major victory for bulls. Which can potentially pave the way for a retest of the $113,000–$115,000 range. And a confirmed move above the 50-day moving average could reignite short-term bullish momentum.
Break Below $110K
A decisive break below $110,000 would expose lower support levels, potentially triggering a sharper decline toward the $103,000–$105,000 territory. However, this scenario would likely be amplified by a fear-driven market response, especially given the history of “Red September.”
Catalysts to Watch
Federal Reserve policy decisions, upcoming inflation data, and institutional ETF flow trends will be crucial indicators for traders.
The $110,000 Bitcoin level represents a critical battleground. One where the outcome will likely determine the market’s trajectory for the remainder of the month. As macro conditions remain volatile, traders should remain vigilant and prepared for a potentially turbulent September.