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Bitcoin (BTC) is currently facing a critical point in its price action, with increasing pressure on long-term holders (HODLers) and a market grappling with uncertainty. As of mid-August, Bitcoin’s price hovers around $116,963, which represents a major cost basis level. Approximately 3.75% of Bitcoin’s total supply sits at this price point, making it a significant zone that could either serve as resistance or trigger a potential pullback. The question now is whether Bitcoin will breach this level and revisit the $110,000 range.
Key Insights:
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Bitcoin’s cost basis at $116,963 holds over 700,000 BTC (about 3.61% of total supply), positioning this level as a pivotal point in the market.
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On August 16, Bitcoin saw a major profit-taking event, resulting in a 1.9% decline to $114,707.
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With diminishing FOMO (Fear of Missing Out) and growing caution, the market could be setting up for a re-test of $110K.
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A cooling of market enthusiasm and thinning liquidity could potentially bring Bitcoin down to $110K before fresh buying interest reappears.
The Significance of $116K as a Cost Basis
Bitcoin’s price around $116,963 represents a significant concentration of the supply—over 700,000 BTC are held at this price point. This makes it a critical level for the market to watch, as it could act as a resistance zone or trigger a pullback. After Bitcoin reached its all-time high (ATH) earlier in August, over $3 billion in realized gains were cashed out by profit-takers, causing a brief drop in Bitcoin’s price. Despite some buying interest at $114K, the proximity to the $116K supply zone suggests that the risk of a pullback remains high. If Bitcoin fails to hold at these levels, the next significant support could be $110K.
Is $114K the New Accumulation Zone?
Bitcoin’s price at $114K might still be considered a decent accumulation zone for some buyers, but with the heavy supply cluster at $116K, it’s unclear if this level will hold. While $114K is above the $110K support, the market is showing signs of weakening, making it less likely that Bitcoin will continue its rally at these levels. The possibility of a pullback toward $110K remains real, as traders become more cautious in the face of slowing accumulation and fading market enthusiasm.
Accumulation Trend Slows Down
On-chain data reveals that Bitcoin’s Accumulation Trend Score (ATS) has dropped significantly, falling from 0.57 to 0.20 within just a week. This sharp decline signals a slowdown in accumulation among HODLers, even at discounted prices. As fewer BTC are being added to holdings, the market could be left with fewer buyers to maintain upward momentum, creating conditions where a pullback toward $110K is more likely.
Market Sentiment: FOMO Fades as Caution Sets In
The overall market sentiment has shifted. The surge in FOMO that previously fueled Bitcoin’s rally has slowed, and caution is now taking over. With an 8% pullback from its ATH, Bitcoin is showing signs of weakening. The ask-side pressure is more evident as sellers are gaining more control of price action. Bitcoin’s rally was initially driven by expectations of monetary easing, but recent market data shows that the chances of a rate cut by the Federal Reserve have decreased. This change in expectations has dampened enthusiasm for Bitcoin, leading to a pause in FOMO-driven buying.
The Likely Re-Test of $110K
With Bitcoin’s momentum cooling and market sentiment shifting, the likelihood of a re-test of $110K is rising. This level represents a key liquidity zone, and a pullback to this price point would provide an opportunity for fresh buying to enter the market. Additionally, the $114K–$115K region appears to be a weak support level for now, with market participants showing less interest in buying at these higher levels.
The re-test of $110K could act as a catalyst for renewed buying interest, particularly if new market developments or external factors drive fresh demand. However, this scenario will depend on the overall market sentiment and whether FOMO can be reignited.
Conclusion: Bitcoin’s Critical Moment
Bitcoin is currently at a crossroads. With a slowing accumulation trend and cooling market enthusiasm, the risk of a deeper pullback is increasing. The $116K cost basis is a major resistance point, and a break below this level could lead to a re-test of $110K. Traders will be closely watching for signs of fresh buying interest or a shift in market sentiment. The coming weeks will be crucial in determining whether Bitcoin can regain its bullish momentum or whether it will continue its pullback toward lower levels.
In this uncertain market environment, all eyes will be on Bitcoin’s price action, as it navigates this critical phase and attempts to build a foundation for the remainder of the year.
