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Bitcoin Price is Losing a Crucial Support Level: Time to Worry or Buy the Dip?
The cryptocurrency market is in turmoil as Bitcoin’s price has plummeted, losing a crucial support level. This sudden downturn has left many investors wondering whether it’s time to worry or buy the dip.
Recent data indicates that Bitcoin’s price has dropped below $111,500, marking its weakest point in nearly two months. As a result, there is an increased risk of retests at $107K and $104K. The current situation highlights fragile short-term holder positioning, weak derivatives momentum, and institutional caution.
On-chain data reveals that short-term holders are under pressure, with their cost basis around $107K now being tested. Since 8.8% of the circulating supply sits at an average entry of $113,600, many short-term holders are already underwater, which could trigger further selling. Derivatives activity adds to the weakness, as spot volume and open interest reflect shallow liquidity.
ETF flows also indicate caution: Bitcoin funds experienced outflows of $1.5 billion, while Ethereum ETFs attracted inflows, suggesting a shift in capital allocation. Despite 90% of BTC wallets still being in profit, traders remain cautious.
The recent loss of support highlights fragile short-term holder positioning, weak derivatives momentum, and institutional caution. Unless BTC reclaims $111.5K-$113K quickly, sentiment risks turning more bearish with deeper downside tests likely.
In the next seven days, it will be crucial to monitor Bitcoin’s price movement. The immediate focus lies on $111.5K-$113K, which serves as both psychological resistance and short-term holder cost basis. A recovery above this zone could lead to a relief rally towards $116K-$118K, but momentum must improve to sustain the move.
However, if Bitcoin fails to hold current levels, $107K becomes the next critical defense. Losing it may accelerate liquidations, pushing BTC toward $104K or even $97K. On-chain data suggests that whales are waiting for these lower levels to accumulate, meaning the downside might invite eventual support.
Institutional flows will also play a significant role in determining the market’s trajectory: continued ETF outflows could pressure sentiment, while small inflows may restore confidence. Macro cues like Fed policy updates will also influence volatility.
To summarize, consolidation above $111.5K-$113K would alleviate bearish pressure, whereas weakness below $111K leaves Bitcoin vulnerable to a sharper correction.
Source: coinpedia.org
