Bitcoin’s recent price action has been tumultuous, with the cryptocurrency hitting a new all-time high of $124,474 on Binance before tumbling towards $113,000. Analysts are now warning that more downside could be ahead for Bitcoin, with the next major support zone seen around $110,000.
A recent CryptoQuant Quicktake post by contributor XWIN Research Japan highlighted the surge in Bitcoin open interest across all exchanges, reaching over $40 billion and nearing all-time high levels. This surge indicates that both whales and short-term traders are heavily involved in leveraged positions, leading to increased market volatility.
Despite the positive sentiment reflected in the funding rate, which remains positive and shows a strong long bias, there is a risk of a long squeeze. This scenario, where forced liquidations of long positions occur due to aggressive leverage, could lead to a cascade of selling and exacerbate volatility in the market.
On the institutional side, BTC fund holdings by Bitcoin exchange-traded funds (ETFs) and institutional investors continue to climb, surpassing 1.3 million. This structural bid from spot ETFs and corporate treasuries absorbing BTC has been steadily reducing the available supply of the digital asset. US-based spot Bitcoin ETFs currently hold $146 billion in net assets, representing 6.47% of Bitcoin’s market cap.
Despite recent outflows from spot Bitcoin ETFs totaling over $645 million this week, there have been two consecutive weeks of inflows amounting to nearly $800 million. BlackRock’s IBIT leads the ETFs with $84.78 billion in net assets as of August 19.
While Bitcoin’s price has dipped below $115,000, its spot trading volume has surged past $6 billion, signaling potential for a rebound. Technical analyst AO has suggested that Bitcoin could be following a trajectory similar to gold, with a target of $600,000 by early 2026. At the time of writing, Bitcoin is trading at $113,845, down 1.5% in the past 24 hours.
In conclusion, while the market sentiment remains mixed with both bullish and bearish signals, Bitcoin’s price action continues to be closely watched by traders and investors. The cryptocurrency’s future trajectory will likely be influenced by a combination of market dynamics, institutional holdings, and technical analysis.