Bitcoin Price Forecast: BTC-USD Holds $110K as Fed Shock, ETF Flows, and Whale Moves Collide

Bitcoin Price Analysis: BTC-USD Struggles at $110K as Fed Turmoil, ETF Flows, and Whale Activity Collide

BTC-USD Slides to Seven-Week Low Amid Fed Independence Crisis

Bitcoin (BTC-USD $109,724, -2.3%) has retreated nearly 12% from its August peak above $124,500, trading at its weakest level since July 9. The immediate catalyst was President Donald Trump’s unprecedented dismissal of Federal Reserve Governor Lisa Cook, which rattled confidence in U.S. monetary policy independence. Risk assets, particularly crypto, sold off sharply as traders reassessed whether the Fed can pivot toward rate cuts free of political interference.

BTC dipped as low as $108,717 on Bitstamp before stabilizing near $110,000, a level that now serves as fragile psychological support. Gold’s rally to $3,430 per ounce and a steepening U.S. yield curve underscored investors’ defensive positioning.

Heavy Liquidations and Coinbase Premium Reversal Signal Pain Trade

The selloff triggered a $700 million wave of liquidations in 24 hours, wiping out overleveraged long positions. Data from CoinGlass shows BTC futures open interest collapsed, while Binance cumulative taker volume plunged by $1 billion, signaling capitulation.

Amid the turmoil, the Coinbase Premium Index flipped back into positive territory for the first time in weeks, showing U.S. spot demand returning as BTC traded at a premium on Coinbase versus Binance. Historically, this divergence has coincided with local bottoms. Traders are now watching whether U.S. buyers can sustain momentum and absorb supply from Asian exchanges.

ETF Flows Flip Positive After Heavy Outflows

Spot Bitcoin ETFs, which had seen $1.2 billion in net outflows between Aug. 15–22, surprised markets Monday with $219 million in net inflows. This marked the first positive print in over a week. Analysts interpret the bounce as bargain hunting, though the sustainability remains uncertain. By contrast, Ethereum-linked ETPs attracted $2.5 billion in inflows month-to-date, highlighting a rotation from Bitcoin into ETH among institutional allocators.

MicroStrategy, the largest corporate holder of BTC, doubled down into weakness, acquiring 3,081 BTC for $356.9 million, bringing total holdings to 632,457 BTC. This contrasts with whales liquidating massive blocks: one entity deposited 22,769 BTC (~$2.59B) to Hyperliquid for sale while simultaneously amassing 472,920 ETH ($2.22B).

On-Chain Patterns Echo Q2 2025 Correction

Cas Abbe of CryptoQuant highlighted the “uncanny resemblance” between today’s pullback and Bitcoin’s June retracement, when BTC dropped from $112,000 to $98,000 before resuming its uptrend.

Similarly, peak cycle indicators remain neutral. The Puell Multiple sits at 1.39, far below the overheated danger zone above 2.2 that historically signaled bull market tops. The MVRV Z-Score also remains in mid-range, implying Bitcoin’s price has not yet reached euphoric overvaluation levels.

This data supports the thesis that the $124,500 print was not the cycle top, but part of a standard 20–30% bull market correction.

Technical Picture: $110K on Edge, $105K Next Support

On the daily chart, BTC remains locked between $110,530 support and resistance near $117,500. A decisive break below $110K exposes Fibonacci support at $105,400, with limited demand until $100,000, a psychological floor.

The 20-day EMA ($115,639) is acting as overhead resistance. Bulls need to reclaim $117,400–$118,000 to restore confidence and trigger a short squeeze, where large short positioning is clustered.

On the weekly chart, BTC still trades above its 20-week EMA (~$108,000), which has served as dynamic support throughout the 2023–2025 rally. A rebound here could reignite momentum toward $125,500 and eventually the $150,000 target cited by technical models. A failure, however, risks a deeper drawdown to the 50-week EMA near $95,300.

Rotation to Ethereum Undermines BTC Dominance

Bitcoin dominance has slipped just above 56%, reflecting the ongoing shift toward Ethereum. ETH recently hit a record $4,955, though it has since retraced to $4,470 (-3.6%). Standard Chartered forecasts ETH at $7,500 by year-end, citing treasury accumulation and ETF demand.

ETH ETPs have absorbed nearly 5% of total ETH supply since June, while BTC ETFs have faced consistent redemptions. This divergence raises questions about whether Bitcoin can maintain leadership in the digital asset market.

Whales and Institutions: Diverging Strategies

The market is seeing a clear divide between whales and corporates. Whales have been net sellers: a single address shifted nearly $2.6 billion in BTC into exchanges, accelerating downside pressure. By contrast, institutions like MicroStrategy and long-term holders are adding.

Short-term holders (less than 1 month) now sit on average unrealized losses of -3.5%, while the broader 1–6 month cohort remains profitable at +4.5%, according to CryptoQuant. This shakeout phase is typical in bull markets, transferring coins from weak hands to stronger, lower-cost bases.

Options Market Shows Wide Divergence

Options traders are split. Deribit data shows open interest concentrated in $140K calls and $95K puts expiring September 26, implying extreme volatility expectations with a $45,000 trading range priced in.

ETH’s options market looks more constructive, with heavy call positioning at $4,000–$4,500, reinforcing support zones and contrasting Bitcoin’s fractured sentiment.

Macro Catalysts Ahead: PCE and Jobs Data

The next test for Bitcoin will be Friday’s core PCE inflation release, where a monthly print above 0.3% could derail September rate cut hopes. Strong employment data next week could compound pressure. Conversely, softer data could reprice cuts and reignite demand for speculative assets like BTC.

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