Bitcoin (BTC) starts the first full week of August at a crossroads as market nerves combine with a BTC price bounce.
-
After bouncing from three-week lows, BTC price action is fielding mixed targets with bigger August volatility expected.
-
The market environment is now fundamentally different from Bitcoin’s old all-time highs from January, analysis says.
-
Macro conditions keep the focus on the Federal Reserve as September interest-rate cut bets return.
-
Bitcoin hodlers stage a mass sell-off at the start of the month, with even whales reducing exposure.
-
Demand for Bitcoin remains firmly in place, helping add context to short-term market nerves.
$116,500 becomes new BTC price “magnet”
After wicking below $112,000 last week, Bitcoin is dividing opinion as data from Cointelegraph Markets Pro and TradingView shows a push toward $115,000.
Concerns over a bigger BTC price correction contrast with the belief that the retracement is over and that BTC/USD is preparing for new all-time highs.
$BTC chart couldn’t be more bullish.
Retest of previous ATH ✅
Daily Close above SMA 50 ✅
Now, BTC is looking good for a new ATH. pic.twitter.com/JZVFIr4Cjt
— BitBull (@AkaBull_) August 4, 2025
“$BTC has continued its streak of setting the high or low within the first week of the month. We’ll have to see if August is going to be any different,” trader Daan Crypto Trades summarized in his latest analysis on X.
“What we do know is that the current monthly high ($116K) has a very low chance of holding as we’ve never seen a monthly wick high this small in the past 4 years.”
Daan Crypto Trades compared recent price moves to those throughout 2025, concluding that volatility has so far been insufficient.
“The current move from high to low is also just ~3.6%,” he noted.
“There’s also a very high likelihood we make a larger move this month. The smallest monthly low to high difference within a month is about 10% for BTC in its past 4 years. This of course says nothing about direction.”
Fellow trader Crypto Caesar likewise eyed a “big bounce” for the start of the TradFi trading week, while comparing current price action to moves seen since May.
Analyzing exchange order-book liquidity, popular commentator TheKingfisher flagged $116,500 as a key level at which short BTC positions would get liquidated.
“Most traders are probably just staring at the price action, but smart money knows this is where the fuel for a move is,” he told X followers Sunday, calling $116,500 a “magnet.”
Bitcoin trend line holds key to deja vu price action
When it hit old all-time highs of $109,300 in January, Bitcoin saw a retracement which proved to be lengthy and painful for bulls.
By April, BTC/USD was plumbing multimonth lows under $75,000, having put in a drawdown versus the highs of over 30%.
Fast forward half a year, and the pair is down almost 10% against its latest record peak, leading to comparisons with the earlier price action.
For trader CrypNuevo, there was little reason to think that Bitcoin would simply repeat behavior from old highs.
“Is January’s Price Action repeating now?” he queried in an X thread Sunday.
“The reversal PA was almost identical at the highs since it’s a common pattern for a pullback after reducing momentum. However, the current situation is very different and it’s unlikely PA repeats further.”
CrypNuevo said that January saw a trip below the 50-day exponential moving average (EMA), which then flipped to resistance.
The 50-day EMA trendline is currently near $112,900, with price seeing just one daily close below it on Aug. 2.
“In January, we saw the 1D50EMA becoming resistance. I doubt we see that now. I think a deviation below it to $110k support should likely hold well,” the thread continued.
CrypNuevo said that “market structure and context” differed from January, pointing to the increasing odds of a US interest-rate cut in September.
Consensus again favors September rate cut
With less US economic data due, the Federal Reserve is itself in the spotlight this week.
The standoff with President Donald Trump continues over interest rates, which Fed Chair Jerome Powell and other officials opted not to cut at their latest meeting.
Powell already faces calls to resign from Trump over policy, which the latter views as too restrictive and costly to the economy.
“Powell should be put ‘out to pasture,’” Trump demanded in a post on Truth Social Aug. 1.
Mixed inflation data and a strong labor market have allowed the Fed to hold firm on its course, but the most recent jobs figures cast doubt over how long rate cuts can be avoided.
Market expectations whipsawed as a result, but are now back to favoring an initial 0.25% cut at the Fed’s next meeting in September, per data from CME Group’s FedWatch Tool.
In the coming days, there will be speaking appearances from several senior Fed figures, including Vice Chair for Supervision Michelle Bowman, who previously signaled that she would be open to a July rate cut.
Earnings results have continued to come in against a backdrop of stiffening US trade tariffs.
“Volatility has returned as August officially kicks off with earnings season in full swing,” trading resource The Kobeissi Letter summarized in a thread on X Sunday.
BTC price dip unites large and small sellers
Bitcoin dipping to new three-week lows beneath $112,000 came amid an ongoing sell-off involving everyone from smaller retail investors to giant whales.
Data from onchain analytics platform CryptoQuant tracked inflows to exchanges and concluded that a marketwide de-risking move was in progress.
On Aug. 1 alone, over 40,000 BTC hit exchanges at a loss compared to when it last moved, and this only from short-term holders (STHs), entities hodling for six months or less.
At the same time, the exchange whale ratio, which tracks the proportion of inflows from whale wallets, reached “dominating” levels.
“When large deposits coincide with whales dominating these deposits, the market typically enters a phase of selling pressure and rapid decline,” CryptoQuant contributor Arab Chain wrote in one of its Quicktake blog posts Saturday.
“If whales continue to deposit Bitcoin to exchanges at the same pace, further pressure on the Bitcoin price is expected.”
Bitcoin demand “still here” — analysis
Taking a broader look at demand dynamics, CryptoQuant came to mixed conclusions, which should ultimately favor bulls.
Related: Bitcoin dip making ‘perfect bottom,’ says analyst: Will BTC rally to $148K?
While price volatility has led to rapid changes in hodlers’ appetite to maintain previous levels of BTC exposure, long-term trends show that Bitcoin is firmly in demand.
“Some investors are probably starting to worry given the recent price drop, especially STH who are now either forced to realize losses or hold underwater positions. To assess whether the situation could worsen significantly, analyzing current demand is essential,” contributor Darkfost said in a Quicktake post Sunday.
Darkfost flagged the Apparent Demand metric, which measures newly mined Bitcoin to the supply that has stayed inactive for the past year.
“When the ratio drops below zero, it means demand has turned negative; conversely, when it rises above zero, it signals positive demand,” he said.
“Currently, demand remains clearly positive, with around 160 000 BTC accumulated over the past 30 days.”
Accumulator wallets, which only buy BTC and have no outgoing transactions, have upped exposure by 50,000 BTC over the past month.
A longer-term view, covering over-the-counter (OTC) deals, likewise shows a clear trend. OTC desk holdings are now over half a million BTC, compared to just 145,000 BTC in 2021.
“Whether we look at short-term or long-term demand, the picture remains broadly positive,” Darkfost concluded.
“There is no major sign of concern from demand-side indicators, despite recent price volatility.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
