Nick Goold
Bitcoin Pulls Back From Record Highs
Bitcoin has been struggling after reaching record highs earlier this summer. Over the past month, the price has fallen more than 6%, making traders wonder if this is just a normal pause or the start of something bigger.
Right now, Bitcoin is holding around a key support zone between $110,000 and $112,000. This area is important because it matches the highs from May 2025. If the price can stay above this level, it may give the market a base to move higher again. But if it breaks down, the next stops could be around $105,000 or even $100,000.
Why Bitcoin Is Under Pressure
Bitcoin’s recent weakness comes from a mix of technical and market factors:
- Whale Selling – In August 2025, a large Bitcoin holder sold more than 24,000 BTC (over $2.7 billion). This big sale caused a sharp drop and triggered forced liquidations of leveraged trades, making the fall worse.
- Technical Breakdown – The sell-off pushed Bitcoin below its 100-day moving average, which signaled weakness to many traders.
- Reduced ETF Purchases – ETF inflows slowed in August 2025, compared to earlier this year, removing a major source of support for Bitcoin demand.
- Macro Pressures – Investors are worried about high inflation, interest rates staying high, and the Federal Reserve delaying rate cuts.
- Seasonal Trends – August and September are often weak months for Bitcoin historically.
Why Technical Analysis Matters So Much for Bitcoin
Bitcoin is very different from traditional investments. Stocks can be valued by earnings, and bonds can be valued by interest payments. In the FX market, currencies are often influenced by the difference in interest rates between countries — for example, traders may buy a currency with higher yields and sell one with lower yields (the “carry trade”).
Bitcoin has none of these anchors. It doesn’t produce income, dividends, or cash flow, and there are no interest rate policies or government bonds tied to its value. Instead, its price is driven mainly by supply, demand, and investor perception. Because of this, technical analysis is one of the most useful tools for understanding and trading Bitcoin.
1. High Volatility
Bitcoin is one of the most volatile major assets in the world. It often moves 5–10% in a single day, far faster than most stocks or currencies. Traders use technical analysis to manage this volatility, helping them decide when to enter, take profit, or cut losses.
2. Self-Fulfilling Levels
Support and resistance levels often become self-fulfilling. If many traders believe $110,000 is strong support, they place buy orders there, which helps the level hold. The same happens with resistance levels where traders sell or take profit. In this way, price often reacts to levels simply because so many people are watching them.
3. No “Fair Value” Anchor
Unlike stocks, bonds, or even FX, there is no agreed way to calculate Bitcoin’s “true” value. Stocks have earnings, bonds have yields, and currencies are tied to interest rates. Bitcoin has none of these, which is why technical analysis often becomes the main framework for trading decisions.
4. Historical Effectiveness
Over the years, tools used in technical analysis — such as moving averages, Fibonacci retracements, and the Relative Strength Index (RSI) — have often lined up with Bitcoin’s major turning points. The 200-day moving average, for example, has historically signaled whether Bitcoin is in a bull or bear trend.
5. Psychology and Momentum
Bitcoin is heavily influenced by fear and greed. A breakout above resistance often sparks buying from traders who don’t want to miss out (FOMO). A drop below support can trigger panic selling. Technical analysis reflects these crowd emotions, giving traders a way to understand and react to shifting market psychology.
Bitcoin Current Market Outlook
On the daily chart, the short-term trend is clearly down. The 10-day moving average is pointing lower, showing that near-term momentum remains weak. At the same time, the market is sitting just below the longer-term 100-day moving average, which is still pointing higher. This creates an important decision point: many traders are waiting to see whether Bitcoin will break lower, or if support will hold and the price will push back up.
Bitcoin Daily Chart
A key factor here is the previous historic highs from May 2025, which are now acting as support. If the market respects these levels, it could set the stage for a bounce.
Looking at the monthly chart, Bitcoin’s long-term uptrend is still intact, with the market having risen more than 400% since 2023. However, this also serves as a reminder that many investors are sitting on large profits, and profit-taking could increase if fear of further losses spreads.
Bitcoin Monthly Chart
Outlook for Traders
At these levels, short-term traders may find opportunities to range trade within the current narrow band.
- A break above the 10-day moving average near $113,000 would act as a buy signal and confirm support at both the previous highs and the 100-day moving average.
- Sellers could look to fade rallies just under the 10-day moving average, or wait for a decisive break below $110,000 for a stronger sell signal.
For medium- to long-term traders, patience may be the best strategy:
- Bullish traders might look to buy between $95,000–$100,000 if another sell-off occurs, or wait for a confirmed move above $115,000.
- Bearish traders could sell on a clear break below $110,000, targeting a test of $100,000 or even lower.
Key Support Levels $110,000, $105,000, $100,000, $95,000, $75,000, $65,000, $50,000
Key Resistance Levels: $113,000 (10-day moving average), $115,000, $120,000, $125,000
Tips for Trading Bitcoin
- Respect Momentum – Trade with the trend, not against it.
- Watch Sentiment – Market mood can change quickly on headlines or social media.
- Beware of Liquidations – Forced selling can make declines much bigger than expected.
- Use Multiple Timeframes – Check daily, weekly and monthly charts for context.
- Manage Risk – Use stop-loss orders, and a clear plan.
Bitcoin is at a key point, with support around $110,000–$112,000 likely to guide the next move. If it holds, the market could stabilize and rally again, backed by scarcity, ETF adoption, and institutional interest. There is still a risk of surprise moves given how far prices have risen and the herd mentality in crypto, but these swings also create plenty of trading opportunities for disciplined traders.
