Crypto Market Recovery
The crypto markets are experiencing a robust rebound this week, with total capitalization approaching $3.92 trillion following a significant sell-off. Bitcoin is at the forefront of this resurgence, rising by 2.19% to trade around $113,336; however, analysts caution that this isn’t sufficient to confirm lasting strength.
What to Expect Next?
Despite the optimistic surge, Bitcoin is encountering challenges around the crucial $115,000 support zone, a level that traders refer to as a “make-or-break” point.
According to Glassnode, BTC is facing resistance close to $113,600, which represents the average price paid by short-term holders over the past three months. Since many of these investors are still under pressure, they might choose to sell at this price point to break even.
This establishes $113,600 as an important barrier to monitor, while $115,600, identified as the one-month cost basis, serves as an additional resistance level should momentum continue to rise.
Market Scenarios
- Dip Before Pump: If BTC declines, it could drop to the $108K–$104K range, potentially flushing out overleveraged bulls. From that position, a strong rebound might propel it toward $130K, with the bull market support band (BSB) around $106K acting as a launching pad.
- Holding the Line: Conversely, if BTC manages to defend the $111K–$112K zone, it could swiftly reclaim $114.5K and continue higher, particularly if rate cuts provide additional momentum.
- Worst-Case Bear Signal: The real threat emerges if there is a deeper decline. A drop toward the 50-week SMA ($92K–$98K) would indicate a bearish shift. Historically, falling below this level has coincided with cycle tops, as observed in 2017 and 2021.
Adding to the bearish sentiment, Bitcoin ETFs have seen a decrease in inflows, reflecting diminished confidence among institutional investors. Over the past fortnight, nearly $1.5 billion has flowed out, while inflows dwindled to just $81.4 million as of August 27.
On a brighter note, BlackRock has boosted Ethereum ETFs with a $262.6 million investment on the same day, driving total inflows to over $307 million and surpassing Bitcoin’s activity.
