Bitcoin finds itself in a precarious balance as it hovers near $118,348, marking a modest 0.39% uptick over the past 24 hours. However, the cryptocurrency’s recent stability belies a more nuanced picture, as analysts caution that a descent toward $108,000–$112,000 or a prolonged range may soon test the mettle of traders.
The Pullback Predicament
Lark Davis, a well-known voice in the crypto community, suggests that if Bitcoin’s price continues to slip, investors should brace for a potential dip to the $108,000–$112,000 range. This area, which acted as a formidable ceiling earlier this year, is now poised to serve as a critical support level. In market psychology, levels that hindered upward price movements often transform into support when revisited. Davis underscores the significance of this zone by pointing to its alignment with the 50% and 61.8% Fibonacci retracement levels. These technical markers, while seemingly arcane, gain traction due to their self-fulfilling nature—traders often set their sights on these levels for entry points.
Moreover, Davis highlights the 20-week exponential moving average, a versatile trend line that moves in tandem with recent price actions. As this line intersects with the $108K–$112K range, it bolsters the argument for robust support. When such technical signals converge—resistance-turned-support, Fibonacci checkpoints, and a rising average—traders typically observe a phenomenon known as “confluence.” Confluence zones, in essence, act as gravitational forces, drawing prices toward them.
For Davis, this scenario isn’t a harbinger of doom but rather a precursor to a “healthy reset.” If Bitcoin does dip, he posits, buyers may well swoop in at these levels, potentially igniting the next upward surge. This aligns with recent insights on how Bitcoin can liquidate $18B with a 10% price gain, suggesting a potential rally to $120K.
The Case for Consolidation
In contrast, Michaël van de Poppe offers a different perspective. He notes that Bitcoin recently hit a roadblock at a key resistance level near its recent highs. This rejection, a telltale sign that sellers have absorbed demand, suggests that momentum might need to decelerate before mounting another advance. Van de Poppe envisions a consolidation phase, with Bitcoin oscillating between a floor and a ceiling while market forces recalibrate.
The TradingView chart shared by Van de Poppe paints a vivid picture: repeated attempts by Bitcoin to breach its upper range, only to be thwarted by resistance. The resulting candle wicks, or quick price spikes, signal active selling pressure. Beneath this, he identifies a potential support zone where Bitcoin might establish a foothold before attempting another breakout.
Van de Poppe’s takeaway isn’t about a deep retracement but rather about the element of time. A sideways range could provide the market with a much-needed breather, clearing out over-leveraged positions and laying the groundwork for future growth. This scenario might also pave the way for altcoin rotation, a phenomenon where traders shift focus to altcoins once Bitcoin stabilizes. This is consistent with observations that Bitcoin steadies as short-term holder profit-taking slows, indicating a potential for stability before the next move.
Looking Ahead
As Bitcoin teeters between these potential pathways, the broader market outlook remains, surprisingly, optimistic. Both Davis and Van de Poppe describe differing yet complementary strategies: the former anticipates a deeper pullback into a support cluster, while the latter foresees a range-bound pause that could catalyze altcoin performances.
For everyday crypto enthusiasts, the strategy is straightforward: keep an eye on whether Bitcoin meanders sideways or takes a detour to the $108K–$112K zone. Regardless of the route, there’s a consensus that the larger bullish framework remains untouched. Yet, how this plays out hinges on the dynamic interplay between support and resistance in the coming weeks.
Technical analysis from CoinDesk Research underscores the bullish undercurrents. From August 16 to August 17, Bitcoin exhibited a 1% gain, buoyed by substantial trading volume. The digital asset navigated past resistance levels, hinting at potential upside after a brief consolidation phase.
As the market navigates these waters, one can’t help but wonder: will Bitcoin’s path forward be as straightforward as the historical patterns suggest? Or will unforeseen market dynamics throw a wrench into the works? Only time will tell.
Source
This article is based on: Bitcoin Steadies at $118K as Analysts Flag Deeper Pullback Risks and Altcoin Rotation
Further Reading
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- Bitcoin Pulls Back to $119K as Looming Inflation Data Could Bring Price Swings
- Bitcoin ‘ugly daily candle’ may signal drop below $117K: Trader
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
