Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Bitcoin has plunged to multi-week lows, retesting the $110,000 level after a significant long liquidation event wiped out $640 million from the crypto market. This sudden downturn has fueled a renewed debate among traders and analysts about the longevity of the current bull run, with some now eyeing a potential retest of the $100,000 mark as the cryptocurrency market nears the end of August.
Bitcoin Faces Renewed Volatility
Data from Cointelegraph Markets Pro and TradingView shows Bitcoin’s price action defined by whipsaw volatility since Sunday, pushing BTC/USD to $110,700, its lowest point since July 10. This sharp decline served as a wake-up call for late longs, leading to the substantial liquidations reported by monitoring resource CoinGlass.
The market’s short-term outlook remains divided. While some traders are looking for a bounce from old all-time highs, others anticipate further downside. Trader Daan Crypto Trades highlighted a large CME gap, the biggest in several weeks, noting that such gaps often fill on Monday or Tuesday.
However, trader Jelle warned of continued pressure on leveraged traders, suggesting that if Bitcoin fails to hold its current area, it could fall back into a previous range, opening the door for a retest of $100,000. CoinGlass exchange order-book data also revealed limited bid support immediately below the current price.
Whale Activity Under Scrutiny
Sunday’s price dive brought Bitcoin whales back into focus, as large players appeared to take profits on long-held coins. One notable event involved an entity selling a massive tranche of BTC, acquired seven years prior, which reportedly tanked the market by $4,000 in minutes and has yet to recover.
According to crypto intelligence firm Arkham, this entity deposited approximately 22,769 BTC, valued at $2.59 billion, to Hyperliquid for sale, subsequently purchasing 472,920 ETH ($2.22 billion) spot and opening a 135,265 ETH ($577 million) long position. The entity’s BTC holdings are now valued at about $11.4 billion, representing a 1,675% profit margin.
Bitcoin enthusiast Vijay Boyapati described this whale distribution as “healthy,” arguing that such selling is necessary for Bitcoin’s full monetization. Statistician Willy Woo echoed this sentiment, suggesting that the slow price movement this cycle is due to the concentration of BTC supply among “OG whales” who bought at significantly lower prices, requiring substantial new capital to absorb their sales.
On-chain analytics firm Glassnode confirmed that the number of addresses holding between 1,000 and 10,000 BTC reached a new August high, indicating active distribution among these larger holders throughout the latest bull run phase.
Divergent Behavior Among Holders
Despite whale distribution, on-chain analytics platform CryptoQuant offers a glimmer of hope for bulls by observing the behavior of smaller Bitcoin holders. Contributor BorisD noted that while distribution is currently dominant, its intensity is weakening as Bitcoin pulls back.
Specifically, wallets holding up to 10 BTC continue to accumulate, demonstrating a resilient “accumulation” mindset. Conversely, wallets with 10 to 100 BTC have shifted to profit-taking since the price hit $118,000, exhibiting distribution behavior.
For wallets holding between 100 and 1,000 BTC, which exert significant market influence, BorisD observed a balance between accumulation and distribution since $105,000, reflecting indecision. This level is identified as a critical support zone, with a move below it potentially triggering widespread fear.
Is the Bull Market “Over” Already?
For some market participants, the recent price action has solidified a more conservative outlook, with popular trader Roman warning that high-timeframe signals suggest the best of the bull run might be over. He cited a developing head and shoulders reversal pattern and previously flagged declining volume and weakening Relative Strength Index (RSI) data as evidence of Bitcoin running out of steam.
Trader ZAYK Charts, applying Wyckoff analysis, also projected a potential downside target for BTC/USD at $95,000, reinforcing the bearish sentiment among those who believe the bull market’s peak has passed.
Macroeconomic Headwinds Loom
Adding to the market’s uncertainty is the impending release of the Federal Reserve’s “preferred” inflation gauge, the July Personal Consumption Expenditures (PCE) Index, due on Friday. This data will be crucial for the Fed’s decision-making regarding interest rates next month.
Last week, Fed Chair Jerome Powell’s surprisingly dovish tone at the Jackson Hole symposium initially spurred hopes of rate cuts, leading to a surge in risk assets. However, the mood has since cooled, with plenty of inflation data still to come. While CME Group’s FedWatch Tool currently places market odds of a 0.25% cut at nearly 90%, trading firm Mosaic Asset cautioned that betting on multiple rate cuts might be “misplaced” if the Fed becomes less tolerant of inflation above its 2% target.
The current market environment for Bitcoin is characterized by significant price volatility, divergent on-chain investor behavior, and a backdrop of crucial macroeconomic data releases. As the debate over the bull run’s fate intensifies, both technical indicators and broader economic factors will continue to shape Bitcoin’s trajectory.
