Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Bitcoin is struggling to hold above the $110,000 mark, experiencing a significant pullback of approximately 10% from its all-time high due to heavy profit-taking that commenced around August 14. On-chain signals now suggest that the leading cryptocurrency could face a deeper correction as market participants reduce their bullish exposure across both futures and spot markets.
Mounting Sell Pressure in Futures Markets
On-chain data indicates a persistent increase in sell-side pressure, threatening to push Bitcoin below the critical $110,000 psychological threshold. CryptoQuant’s Taker-Buy Sell Ratio, a key indicator for futures markets, has remained predominantly negative since July, currently standing at 0.96. This metric signifies that sell orders are outweighing buy orders, reflecting a lack of conviction among derivatives traders for a significant near-term recovery.
Spot Market Participants Also Retreating
The trend of reduced demand is mirrored in the spot market. Bitcoin’s Spot Taker CVD (Cumulative Volume Delta, 90-day), which tracks net buying and selling over a three-month period, shifted from “neutral” on August 18. Since then, it has consistently shown red bars, indicating that sellers are dominating spot market activity and offloading rather than accumulating assets.
Potential Price Levels to Watch
With demand weakening across both futures and spot markets, Bitcoin faces an increased risk of falling below $110,000. Should this occur, the next significant support level for BTC is identified at $107,557. Conversely, if buyers manage to regain momentum and initiate a rally, the price could climb towards $111,961, with a breach of this resistance potentially leading to a move towards $115,892.
Overall, Bitcoin’s current market dynamics are characterized by widespread profit-taking and diminishing demand across both derivatives and spot trading, signaling a cautious sentiment among traders as the cryptocurrency navigates potential further price adjustments.
