Bitcoin falls to 110k – Here’s why and where next for BTC?

Bitcoin has fallen to a 7-week low, dropping 1% over the past 24 hours, 4% over the past 7 days, and trades 12% down from the record high reached mid-August.  

The broader cryptocurrency market is also under pressure, with the total crypto market capitalization falling 2% over the day, 24 hours to $3.79 trillion at the time of writing. The Fear and Greed Index has fallen to 43, the lower end of Neutral, as sentiment takes a hit. This is down from 53 last week. 

Bitcoin failed to hold Powell-inspired gains 

BTC jumped to 117k on Friday following a dovish lean from Federal Reserve Chair Jerome Powell. The prospect of lower interest rates boosted risk assets across the board, with BTC soaring 3.5% and US stocks rebounding back up towards record highs. However, the largest cryptocurrency was unable to sustain those gains. 

Risk appetite following Powell’s speech has since faded, and the broad market mood has deteriorated, as Trump fired Fed Governor Lisa Cook and Barclays warned of a 50/50 chance of a recession under Trump. 

Why is Bitcoin falling? 

In addition to a worsening market mood, Bitcoin has come under pressure amid signs that whales are selling out of the largest cryptocurrency. Not only does this increase supply, pulling prices lower, it also points to falling confidence in BTC among big players. 

A massive Bitcoin whale sold out of 24,000 BTC worth $2.7 billion on Sunday, sending the price 4k lower shortly after. Although this whale still holds 152,874 BTC.  

There is growing evidence of whales selling out of BTC for ETH.  MLM wrote on X that a whale sold 18,142k BTC worth $2.04 billion, most of which rotated into Ethereum. MLM noted that the two entities have bought 416.598k ETH combined worth $1.98 billion. 

ETH vs BTC 

There are further signs that ETH is capturing investors' attention over BTC. Spot Ethereum ETFs saw $443.9 million in net inflows on Monday, recording its third straight day of inflows. Meanwhile, BTC recorded $219 million in net inflows. Across August, BTC ETF recorded outflows of $972 million compared to ETH ETFs, which have recorded $3.23 billion in net inflows in the month to date. 

Bitcoin could struggle to push much higher while capital rotates into Ethereum. ETH reached a record high of 4955 on Sunday, where it faced rejection and now trades at 4400. 

Bitcoin technical analysis 

After rising to its record high of 124.4k BTC/USD has rebounded lower, breaking below the multi-month rising trendline and the 50 SMA. The price is testing 110k support. Yesterday’s bearish engulfing candle, aggressive break below the 23.6% Fib level (of the 74.4k low to 124.4k high), and the RSI below 50 keep sellers hopeful of further declines. 

Sellers will look to break below 110k to open the door to 105k, the 38.2% Fib level. Below here, the 100k support zone comes into focus, the psychological level, the 200 SMA, and the 50% fib level. 

Should buyers defend 110k, the next resistance level can be seen at 112k, the 23.6% Fib level ahead of 117k, the 50 SMA, and Friday’s high. A rise above here opens the door to 124k and fresh record highs. 

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