The recent surge in Bitcoin’s price has stalled, with sellers regaining control as profit-taking pressure builds, despite signs of renewed market momentum. This development has left investors and analysts alike wondering what’s next for the cryptocurrency.
Bitcoin’s price retreated to $118,782 after nearing its $122,867 all-time high on Aug. 11, marking a 3% decline over the past 24 hours. This move came after a brief recovery from the $112,000 zone, which had pushed Bitcoin back near record territory before sellers reasserted pressure. According to market data, Bitcoin’s rally toward a new all-time high has been hindered by profit-taking, with 94.1% of supply in profit and a realized profit/loss ratio of 1.9.
Market Momentum and Profit-Taking Risk
Despite the current downturn, market momentum is improving, with the relative strength index rising from 41.5 to 47.5, bouncing from oversold conditions. Spot cumulative volume delta has shifted from heavy selling to near-neutral territory, while spot trading volume fell 22% to $5.7 billion, suggesting the recent rebound has not yet attracted broad participation. In derivatives, futures open interest eased to $44.1 billion, with long-side funding rates still elevated but slightly lower than last week.
In options, open interest increased 6.7% to $42.4 billion, while the volatility spread contracted sharply to 10.45%, near its lower band, indicating that traders may be pricing in too little volatility. The 25-delta skew eased but stayed above its high band, reflecting continued demand for downside hedges. Exchange-traded fund flows also improved, with outflows shrinking by more than half, although trading volumes dropped 27.7% to $13.7 billion. ETF MVRV rose to 2.43, meaning funds are holding significant unrealized gains, which could encourage selling.
Technical Analysis and Support Levels
Bitcoin’s daily chart shows the price retreating from the upper Bollinger Band after testing $122,000 resistance. While momentum and MACD indicators point to a buy, indicating underlying support, the RSI is at 58, which is neutral but leaning toward bullish territory. All of the short-term moving averages (10, 20, 30, and 50-day) are still above $116,000 and in a bullish formation, supporting the $116,000–$117,000 range as a crucial support.
A close above $122,500 could pave the way for new highs, while a break below this range might see Bitcoin return towards the $112,000 mark. As the market continues to fluctuate, it’s essential for investors to keep a close eye on these support levels and adjust their strategies accordingly. With the current profit-taking pressure and improving market momentum, Bitcoin’s price is likely to remain volatile in the short term, making it crucial for investors to stay informed and adapt to changing market conditions.
