Bitcoin’s recent price oscillation has left investors on edge as the cryptocurrency briefly recovered, only to become ensnared in a bearish Fair Value Gap (FVG) zone. The digital asset, which nosedived to $112,000 earlier, had shown signs of life, clawing back to a high of $115,000. Yet, analysts warn this bounce might be more of a false dawn than a genuine reversal.
The Bearish Fair Value Gap Looms
According to crypto analyst Kamran Asghar, Bitcoin’s retracement into the bearish FVG signifies potential trouble. This gap, nestled between $114,000 and $115,500, was birthed during a swift decline from $118,000, and now acts as a significant supply zone. For Bitcoin to break free, bulls must intensify their buying efforts—no small feat with resistance mounting at these levels. “The gap is like a magnet,” Asghar noted, “drawing prices back until it’s filled.”
In the world of cryptocurrencies, supply zones are crucial. They often dictate market sentiment, acting as psychological barriers where the tug-of-war between buyers and sellers intensifies. For Bitcoin, the current scenario suggests a precarious balance, with the possibility of another downward slide looming large. This aligns with observations in Bitcoin Net Taker Volume Stays Bearish – Fragile Market Structure Risks Liquidation Cascade, which highlights the ongoing market fragility.
Potential Pitfalls and Silver Linings
Should Bitcoin face rejection from this supply zone, Asghar anticipates a descent to mid-July levels, potentially plumbing depths between $107,500 and $109,000—a potential 5% drop. Yet, there’s a silver lining. This range has previously served as a robust support level, offering bulls a potential springboard for a resurgence.
Interestingly, despite the bearish undertones, Bitcoin’s funding rate remains positive, as Coinglass data indicates. This suggests that many traders still harbor bullish expectations, betting on an upward trajectory. However, the recent dip in funding rates throughout August hints at a waning bullish fervor, a trend also noted in Weakness Begins to Emerge For Bitcoin as Crypto Market Trends South.
Historical Context and Market Sentiment
Bitcoin’s journey through 2025 has been tumultuous, marked by both unprecedented highs and sharp corrections. The current scenario is reminiscent of previous cycles where price volatility tested investor resolve. However, the cryptocurrency’s resilience, often bolstered by strong support levels and bullish sentiment, has historically paved the way for recoveries.
Yet, with the bearish FVG in play, the path forward remains uncertain. The key lies in whether bulls can muster the strength to overcome the looming resistance. Asghar advises caution, urging investors to monitor Bitcoin’s performance closely. “It’s a pivotal moment,” he remarked. “The market’s next move could set the tone for the rest of the year.”
Forward-Looking Implications
As we look ahead, the cryptocurrency community faces a conundrum. Will Bitcoin break free from the bearish shackles, or will it succumb to the pressure, retracing further into the depths? The stakes are high, and the coming weeks will be crucial in shaping the narrative for the remainder of 2025.
For now, the market waits with bated breath, eyes trained on Bitcoin’s every move. The next chapter in this saga promises to be anything but dull, with the digital asset poised at a crossroads—teetering between potential triumph and further tumult.
Source
This article is based on: Bitcoin Risks Another Crash Following Recovering Into Bearish FVG Zone
Further Reading
Deepen your understanding with these related articles:
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- Bitcoin Price Analysis: BTC Troubles Just Getting Started After 3% Daily Decline?
- Bearish Arthur Hayes says Bitcoin could retrace to $100K on macro headwinds
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.
