Bitcoin (BTC-USD) Struggles Below $110K as Market Awaits Direction
Bitcoin (BTC-USD) is trading around $108,776, marking a 0.17% intraday decline, after a turbulent week in which prices briefly fell to $107,389 and peaked just under $109,453. The move comes after its first monthly loss since April, with Bitcoin shedding over 5% in the past week. The breakdown beneath $110,000, the 100-day moving average, and the Short-Term Holder Realized Price at $108,928 has heightened market caution. A similar breach earlier this year in February triggered a 20% retracement, raising concern that this latest move could signal further corrective pressure.
Technical Breakdown Around $107K Support and $114K Resistance
Price action reveals a series of lower highs and lower lows, a textbook bearish formation. On the daily chart, Bitcoin reversed sharply from its August peak of $124,517, leaving heavy resistance overhead between $112,000 and $114,000. Market structure implies that only a strong daily close above $114,000 could shift sentiment back toward bullish territory. Conversely, if Bitcoin loses footing at $107,000, bears could test the $104,000 region, which aligns with the 200-day EMA at $104,072, and the broader psychological floor at $100,000. Momentum oscillators are underscoring the weakness: the RSI rests at 38, the MACD prints −1,916, and the CCI sits at −118, confirming oversold but still fragile conditions.
On-Chain Flows Signal Shrinking Supply Despite Price Weakness
While short-term momentum tilts bearish, underlying supply dynamics remain supportive. Exchange reserves have been steadily declining since early 2024, reflecting institutional and retail investors shifting coins into cold storage. At the same time, spot ETFs now hold more than 1.3 million BTC, pulling liquidity further off exchanges. Structural indicators such as the NVT ratio, which has dropped 23% to 23.7, highlight stronger transaction activity relative to Bitcoin’s market capitalization. Futures volumes are cooling, pointing to a decline in leverage. Historically, this combination of tightening supply, reduced speculation, and healthier network activity sets the stage for longer-term rallies.
Seasonality Pressures and 2017 Parallels
History works against the bulls in September. Since 2013, Bitcoin has logged negative performance in eight out of twelve Septembers, with an average monthly return of −3.8%. Traders often dub this pattern the “September Effect.” Yet some analysts argue the current setup resembles 2017, when Bitcoin dipped sharply in late August, consolidated around a strong base, and then launched into its parabolic run toward $20,000. The present range between $105,000 and $110,000 could act as a similar base, potentially providing the launchpad for a breakout to $124,500 in the coming weeks.
Macro Landscape: Fed Cuts and Dollar Weakness Provide Tailwinds
Macro conditions may soon swing in Bitcoin’s favor. The correlation between BTC and the U.S. Dollar Index (DXY) has weakened to −0.25, the lowest in two years. With futures markets pricing an 89% probability of a Fed cut in September and a total of 55 basis points of easing by year-end, the dollar is projected to slide as much as 8% in 2025. Dollar weakness tends to attract capital into Bitcoin as an inflation hedge and liquidity trade. A dovish Fed could reignite momentum across the entire crypto market, particularly in altcoins, which historically outperform Bitcoin once liquidity expands.
Miner Revenue Compression and the BTCfi Debate
A new challenge looms in the form of collapsing miner revenues. Transaction fees have dropped over 80% since April 2024, with as many as 15% of blocks now mined with negligible fees. After April’s halving, block rewards are only 3.125 BTC, pushing miners into deeper dependence on fees. The decline in activity linked to Ordinals and Runes has drained fee demand, while spot ETF adoption has shifted volume off-chain. Developers are turning attention to BTCfi (Bitcoin-native DeFi) as a potential lifeline, where lending, yield, and trading strategies tied directly to BTC could restore fee flows. If successful, Bitcoin could evolve beyond its role as “digital gold” into an active financial backbone.
Institutional Positioning and JPMorgan’s Fair Value Thesis
Institutional investors are maintaining exposure despite volatility. JPMorgan’s fair value model indicates Bitcoin remains undervalued, with the MVRV ratio at 2.1, well below overheated levels near 4 that marked past cycle peaks. Hedge funds continue to short volatility, a strategy that historically precedes sharp market swings when conditions reverse. ETF inflows have remained steady, reflecting durable demand. These structural currents suggest that while short-term weakness persists, institutional confidence in Bitcoin’s long-term trajectory is intact.
Strategic Price Zones and Market Outlook
The immediate support zone sits at $107,000, with deeper protection at $104,000–$104,700, and a hard defense line at $100,000. Upside requires a break above $114,000, which would open the way to $120,000 and $124,500. Failing to reclaim the Short-Term Holder Realized Price risks a repeat of the February correction, which shaved 20% off BTC’s value, potentially targeting $86,000.
Buy, Sell, or Hold on Bitcoin (BTC-USD)
The short-term picture leans bearish, with momentum favoring a retest of $104,000 if $107,000 does not hold. The medium-term outlook into Q4, however, carries bullish weight, supported by Fed easing, exchange reserve declines, ETF flows, and seasonality turning positive after September. The long-term thesis remains firmly intact: Bitcoin’s fundamentals — tightening supply, growing institutional participation, and emerging BTCfi innovation — point to a trajectory back toward all-time highs. Based on the data, BTC-USD is a Buy on dips toward $104,000–$107,000, a Hold above $110,000, and a strong accumulation play heading into a liquidity-driven Q4.
