Bitcoin Experiences a 7% Dip from All-Time High - Will $110K Be the Following Crucial Milestone?
In early August 2025, Bitcoin (BTC) is trading within a narrow short-term price range of approximately $114,000 to $115,000. This consolidation phase, characterized by low volatility and limited upside momentum, has been marked by a shift in the overall uptrend momentum amidst a slump in spot demand and rising sell-off.
Options traders are closely monitoring the $115,000–$116,200 zone as a key resistance area, with a daily close above this level potentially triggering a bullish breakout toward $118,000–$121,800 in the short term. Strong open interest in call options at strike prices $118,000, $124,000, and $126,000 for late August expiry suggests a market sentiment that anticipates a potential rally toward $126,000 by the end of the month.
On the downside, if Bitcoin fails to hold above roughly $112,500, it could retrace toward support levels near $110,000 and $108,400. Stronger support is found at about $104,500 if selling pressure intensifies.
Recent price dips are viewed as potential corrections rather than a market top, with renewed accumulation expected to support higher prices. Institutional demand, as illustrated by BlackRock's ETF inflows, supports a bullish near-term outlook.
The market is currently in a cautious but constructive phase, with a potential breakout above $116,200 as the critical trigger for a short-term rally. However, options traders are preparing for a potential dip to $105K and $110K, suggesting that they expect a sharp rebound in the short term or have heavily hedged to cover a potential upside move.
The recent dump in Bitcoin has shown an increase in demand for short-dated call options, especially for 1-week, 1-month, and 3-month tenors. This surge in demand for calls eyeing $120K and $125K by the end of August, combined with a BTC 25 delta skew that jumped 4% to 6% across the above tenors, indicates a short-term bullish sentiment or short covering.
Despite the current market cautiousness, the market is awaiting confirmation of breakout strength amidst growing institutional interest and constructive options positioning. A strong rebound in the Coinbase Premium Index could confirm a potential attempt for a Bitcoin breakout.
High speculation and elevated profitability have been observed, with profitability steadily retreating as holders book profits. The recent drop in demand for U.S investors, as indicated by the Coinbase Premium Index (CPI), suggests that demand has eased in the past two weeks. However, the level of current sell-offs is still not as intense as the late 2024, which hit over $4.5 billion.
Analyst Willy Woo has suggested that Bitcoin could remain range-bound before attempting another breakout, reinforcing a similar sell-off that marked the previous local price peak. Swissblock, on the other hand, has suggested that this could be just a tactical cool-off, with an August breakout still on the cards.
In conclusion, Bitcoin is currently trading within a narrow short-term price range, with options traders preparing for a potential dip to $105K and $110K. The market remains cautious but constructive, with a potential breakout above $116,200 as the critical trigger for a short-term rally. Institutional demand and constructive options positioning suggest a bullish near-term outlook, but the market is awaiting confirmation of breakout strength.
- Despite the current dip in Bitcoin (BTC), analyst Willy Woo suggests that it could remain range-bound before attempting another breakout, possibly identical to the previous local price peak's similar sell-off.
- The surge in demand for short-dated call options, especially for 1-week, 1-month, and 3-month tenors, indicates a short-term bullish sentiment or short covering in the crypto market.
- Swissblock, in contrast, views the current market cool-off as just tactical, with an August breakout still on the cards, hinting at potential investment opportunities in Bitcoin, other cryptos like XRP, and the broader finance and technology industry.
