Bitcoin Price Prediction: Can Bitcoin Hold Onto $110K As Retail Sentiment Turns “Ultra Bearish”?

As the Bitcoin (BTC) price retraced to a 17-day low of $112,600, retail traders seem to be flipping bearish. The alpha cryptocurrency declined over 2.75% in the last 24 hours as the crypto market continues adjusting to a key technical shift.

Following weeks consolidating in an ascending triangle, BTC price has broken below the structure, signalling a warning to traders who had been watching the $115,000 zone as support.

BTC Price Prediction: Bitcoin Back Above $120K and Targeting New ATHs

Bitcoin’s daily chart shows a head-and-shoulders pattern with neckline support at $112,000. A break below this level could take it further down to $108,000 with an extended target at $105,150. Multiple strong bearish candles forming on its price chart hint at sustained downside momentum. Technical indicators confirm this analysis, with Bitcoin’s MACD turning negative and RSI at 41 suggesting that there is more room to move downside without a strong bounce before hitting oversold conditions.

Bitcoin still has a sequence of higher lows since June, with the small-bodied candles forming at $113,000 showing indecision and not capitulation. While short-term risk shows downside, the medium-term outlook is constructive. If buyers enter the market and take it to the resistance at $116,150, then BTC could bounce to $120,900. According to the latest bitcoin price prediction from Bitemycoin’s industry experts, a break above $124,450 could open up retests of $127,540 and beyond. 

The bullish case for traders is the bullish engulfing candle above $116,150, which is a buy signal that will target $120,900, with a stop loss below $112,000. Meanwhile, a bearish case would be a break below $112,000 that could short the market and target $108,000. Stop-loss should be above $116,000.

The next few weeks are crucial for Bitcoin’s price, as a failure to hold on to $112,000 could take it to $100,000, while a break above resistance could get it back above $120,000. Despite the near-term selling, institutional investors and long-term holders are still supporting the market. Firms like Strategy and Metaplanet continue to buy the dips, which has helped the broader segment remain neutral. The structural bullish trend still persists, which means that for long-term investors, this correction is part of an accumulation phase and not necessarily the end of the bull run.

At the time of writing, Bitcoin (BTC) is trading at $113,884, down 1.8% in the last 24 hours.

If Bitcoin could breakout from the resistance level of $116,150, the coin can rise up to $127,540.

Bitcoin Sentiment Hits Lowest Level Since June, When Traders Panic-Sold Fearing War Between US and Iran

This breakdown took Bitcoin below its 50-day SMA at $115,870, which now serves as its resistance. The move below followed a rejection at the all-time high of $124,450, where a bearish engulfing candle capped a four-week-long rally for alpha digital asset. This reversal has turned short-term sentiment from bullish continuation to corrective pullback.

Santiment analysts noted on Wednesday that retail traders have done a “complete 180” after Bitcoin failed to continue last week’s rally and dipped below $113,000. They also reported that the past 24 hours marked the “most bearish sentiment” ever seen for BTC on social media since June 22, when fears of a potential war scenario between the U.S. and Iran caused a cascade of panic sells.

The analytics firm highlighted that negative social media sentiment is positive for traders who buy the dip, especially when “fear is maximized”. Short-term retail traders are more likely to panic sell or salvage profits than their “diamond-handed” counterparts, who view crypto assets as a longer-term investment. Santiment also pointed out that panic selling was a “good sign” of an upcoming dip-bounce.

Bitcoin fell to $112,656 in late trading on Coinbase on Tuesday, its lowest price point since August 3, when it fell toward support levels around $112,000. BTC is now trading 8.5% below its all-time high from last week, while the total crypto market capitalization dropped below $4 trillion to a two-week low. Its Fear & Greed Index has fallen to its lowest level since June at 44/100, signalling “Fear” among investors.

As Santiment put it, “markets tend to move in the opposite direction of the crowd’s expectations”.

U.S. Bitcoin ETFs Recorded $523 Million in Single-Day Outflows as Fed Rate Cut Hopes Dip

U.S. spot Bitcoin exchange-traded funds reported significant net outflows on Tuesday as institutional investors repositioned their holdings ahead of key macroeconomic events. According to data from SoSoValue, BTC ETFs recorded total daily net outflows of $523 million, with Fidelity’s FBTC leading the exits with $246.9 million, followed by Grayscale’s GBTC with $115.53 million in negative flows. BlackRock’s IBIT, the world’s largest spot Bitcoin ETF, reported zero inflows or outflows for the day.

Rachel Lucas, an analyst at BTC Markets, said this was one of the largest single-day outflows experienced by U.S. spot Bitcoin ETFs since their launch in January 2024. She noted that the scale of these exits suggests that there is a shift happening in institutional positioning, with investors either rotating funds out to lock in profits at recent highs and reallocating them into cash or U.S. Treasury bonds, or it is a broader de-risking in response to renewed inflationary concerns, stronger U.S. dollar moves, and uncertainty around the Federal Reserve’s monetary policy.

Earlier, traders were hopeful of the Federal Reserve cutting interest rates on the dollar in September, but last week’s hotter-than-expected producer price index (PPI) numbers have eroded the market’s confidence in a potential rate cut. Investors are now waiting for further macro signals, such as the minutes from the Federal Open Market Committee meeting in July that will be released later today, and Fed Chairman Jerome Powell’s Jackson Hole speech on Friday.

Lucas said that in the medium-term, ETFs remain “structurally important” to crypto prices, as they hold 6.47% of Bitcoin’s and 5.17% of Ethereum’s total supply. She also noted that continued buying from crypto treasury companies indicates that demand is not collapsing but rather rebalancing. A dovish stance from the Fed this week could reverse the negative flows into positive, taking the BTC price higher.

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