Finance

Bitcoin’s Dip: Can the Crypto King Rebound After Failing $112,000 Resistance?

Bitcoin fell below $110,000 after failing resistance. Analysts watch for support, as gold gains amid inflation fears.

September 4, 2025, 5:31 PM

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As the price of gold fluctuates, investors watch the market with bated breath, hoping to strike it rich. By Miami Daily Life / MiamiDaily.Life.

Executive Summary

Bitcoin declined below $109,500 after failing to sustain above the $112,000 resistance level, despite U.S. jobs data indicating a weakening labor market.

Analysts warn of potential further downside, with some anticipating a retest of the $100,000 support, while critical support is identified at $110,000.

Macroeconomic factors, including persistent inflation concerns and increased deficit spending, are supporting gold’s rise as a global safe haven asset, adding complexity to Bitcoin’s immediate outlook.

The Story So Far

Bitcoin’s recent decline below $110,000 stems from its inability to maintain critical resistance levels, specifically around $112,000, leading to sustained selling pressure. This struggle is set against a complex macroeconomic backdrop where, despite a weakening U.S. labor market that typically favors risk assets, persistent inflationary pressures and cautious expectations for Federal Reserve interest rate cuts are driving investor preference towards traditional safe havens like gold.

Why This Matters

Bitcoin’s failure to hold key resistance levels and the anticipation of a retest of $100,000 signal immediate bearish pressure and heightened investor uncertainty, even as weakening jobs data might typically boost risk assets. This suggests that broader macroeconomic concerns, such as persistent inflation and the potential for limited Federal Reserve rate cuts, are overriding typical market drivers for cryptocurrencies. Consequently, the strong performance of gold as a “GLOBAL safe haven” implies a potential shift in investor preference, challenging Bitcoin’s narrative as a primary inflation hedge amidst ongoing economic complexities.

Who Thinks What?

Popular trader BitBull believes Bitcoin was rejected from a major resistance level and warns that until the $114K level is reclaimed, any upward move could be a “bull trap,” potentially leading to a “big correction.”

Crypto market insight firm Swissblock identifies critical support at $110,000 and thinning resistance to the upside, suggesting a need for fresh momentum to clear the “$113.6K–$115.6K gate” before contending with “heavy resistance into $118K.”

Trading firms like Mosaic Asset and The Kobeissi Letter attribute Bitcoin’s struggles to broader macroeconomic headwinds, including persistent inflationary pressures, the possibility of a “one and done” Fed rate cut, and gold’s strong performance as a global safe haven due to increased deficit spending.

Bitcoin experienced a notable decline on Thursday, falling below the $110,000 mark and dipping under $109,500 after failing to maintain a critical resistance level around $112,000 following the Wall Street open. The cryptocurrency’s 2% daily dip occurred despite new U.S. jobs data indicating a weakening labor market, which typically might offer a boost to risk assets, leaving market participants to weigh potential further downside against key support levels.

Bitcoin Struggles Against Resistance

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD losses exceeding 2% on the day. Bulls were unable to convert the $112,000 area into sustainable support, and despite the U.S. unemployment numbers suggesting a softening labor market, selling pressure persisted.

Popular trader BitBull commented on X, stating that “$BTC got rejected from its major resistance level.” BitBull further warned that “Until the $114K level is reclaimed on the daily timeframe, every BTC move will just be a bull trap,” suggesting a potential “big correction before reversal” if the level is not quickly reclaimed.

Critical Support and Upside Targets

Many market participants are now reportedly anticipating a retest of the $100,000 support level in the short term. However, crypto market insight firm Swissblock identified “critical support” at $110,000, citing an area of high trading volume.

Swissblock also noted that resistance to the upside was thinning, stating, “Bitcoin is breaking out from the critical zone: a straight slide to $100K was never the base case. The wall resisted, until now.” The firm indicated that after a pullback, fresh momentum would be needed to clear the “$113.6K–$115.6K gate” before contending with “heavy resistance into $118K.”

Macroeconomic Headwinds and Gold’s Rise

The broader macroeconomic landscape, characterized by weaker labor market signals, has increased the odds of the Federal Reserve implementing an interest rate cut on September 17. However, trading firm Mosaic Asset expressed caution, suggesting that this potential cut could be a “one and done” scenario for the Fed.

Mosaic Asset warned that inflationary pressures continue to build, with inflation-sensitive areas of capital markets moving higher. This sentiment aligns with observations from Mosaic Asset and trading resource The Kobeissi Letter, which highlighted gold’s recent breakout, outperforming both stocks and cryptocurrencies.

The Kobeissi Letter attributed gold’s strength to a combination of the market pricing in higher long-term inflation and increased deficit spending. “Deficit spending is flooding the US Treasury market with supply. Gold has become the GLOBAL safe haven asset,” Kobeissi wrote on X.

In summary, Bitcoin is navigating a challenging period, marked by a failure to hold key resistance levels and sustained downside pressure. While some analysts point to critical support, broader macroeconomic concerns regarding inflation and the performance of traditional safe havens like gold are adding complexity to the cryptocurrency’s immediate outlook.