Bitcoin Price Holds $118K as ETF Demand and Fed Outlook Clash With Market Risks

Bitcoin Consolidates Near $118,000 Amid Tight Range Trading

Bitcoin (BTC-USD) is consolidating at $118,230.27, edging up 0.28%, after peaking at a record $124,533 earlier in the week. Market capitalization stands at $2.356 trillion, with trading volume at $20.09 billion. Price compression is evident between $117,279–$118,445, a setup that often precedes a decisive breakout.

Technical Picture: $117K Support and $119.5K Resistance Define the Range

Daily candles show strong defense of the $117,000–$118,000 zone, where buyers have consistently stepped in. A break lower exposes $116,500 and then $111,919. Resistance stands at $119,000–$119,500, and if reclaimed, targets open toward $121,000–$122,500.

Momentum indicators are split: RSI sits at 53, showing neutrality, while MACD leans bearish. Yet EMAs across 20–200 periods remain aligned bullishly, with long-term SMAs confirming structural support well above $100,000, signaling the broader trend remains intact.

ETF Inflows Drive Institutional Adoption of Bitcoin

Spot Bitcoin ETFs continue to dominate flows, with assets under management climbing past $158 billion, closing in on the $198 billion managed by gold ETFs. Multiple billion-dollar inflow days last week highlight strong institutional appetite, particularly from pension funds, sovereign wealth vehicles, and insurers.

This ETF demand has become the backbone of Bitcoin’s rally, cushioning against macro volatility and providing a steady bid even as retail volumes fade.

Macro Tailwinds: Rate Cuts, Liquidity Surge, and Washington’s Policy Shift

Traders are pricing a 92.5% probability of a Fed rate cut in September, followed by another in October. Global liquidity remains at record levels, with M2 money supply at $55.5 trillion, funneling capital into risk assets.

U.S. political momentum is also turning. Legislation like the GENIUS Act provides a framework for stablecoins, opening doors for institutions. Bitcoin has surged nearly 80% since Trump’s election win, though regulatory capture concerns linger with Trump-linked ventures such as World Liberty Financial’s USD1 stablecoin gaining traction.

Altcoin Rotation Undermines Bitcoin Dominance

Bitcoin’s market dominance has slipped from 65% in May to 57.6%, with capital rotating into major altcoins:

• Ethereum (ETH-USD): $4,556.25 (+3.14%), eyeing its 2021 peak near $4,800.

• Solana (SOL-USD): $193.84 (+2.54%), approaching $200 resistance.

• Dogecoin (DOGE-USD): $0.23 (+2.41%), fueled by retail flows.

• XRP (XRP-USD): $3.12 (+0.15%), steady despite weaker volumes.

• Render (RENDER-USD): $4.04 (+3.20%), leading AI-linked tokens.

• Pepe (PEPE-USD): $0.000011 (+2.30%), riding meme speculation.

Altcoins have collectively added 50% in value since July, with market capitalization surpassing $1.4 trillion. Ethereum’s trading volume — up 300% this month — has been flagged by Coinbase Institutional as a signal of a potential altcoin season.

Volatility Shock: $261 Million in Leveraged Losses

On August 14, a hotter-than-expected PPI report triggered $261 million in liquidations. Ethereum accounted for $115 million, Bitcoin $29 million. Validator exit queues for ETH ballooned to 897,599 ETH, amplifying selling pressure.

This event underscores a structural fragility: excessive leverage combined with automated liquidations creates sudden, cascading moves that can shake confidence even in bullish cycles.

Diverging Forecasts on BTC Trajectory

Opinions among top investors diverge sharply:

• Steven McClurg (Canary Capital): BTC between $140K–$150K this year before macro drag.

• Michael Saylor (MicroStrategy): Long-term target of $1M, viewing BTC as binary: zero or exponential.

• Robert Kiyosaki: Calls Bitcoin “the people’s money,” projecting $1M as fiat confidence erodes.

• Mike Novogratz (Galaxy Digital): Warns that $1M Bitcoin by 2026 would reflect economic collapse, not prosperity.

Buy, Sell, or Hold BTC-USD?

With Bitcoin pinned around $118K, the market faces a decision point. Institutional ETF flows, macro liquidity, and policy support tilt bullish. Yet oscillators, thinning volumes, and liquidation shocks warn of fragility.

• Bullish Case: Break above $120,400 sets stage for $127K–$131K.

• Bearish Case: Failure of $117K support risks flush toward $112K–$115K.

Verdict: For investors, BTC-USD is a Hold-to-Buy, supported by ETFs and liquidity. Traders should remain defensive with stops near $116,700, but upside toward $127K+ remains viable if resistance breaks.

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