TLDR
- Bitcoin’s critical $116,963 threshold holds 700,000+ BTC as traders watch for potential breakdown toward $110,000
- Massive $3 billion profit-taking surge on August 16 triggered 1.9% intraday selloff as BTC dropped to $114,707
- HODLer engagement weakens with Accumulation Trend Score plunging from 0.57 to 0.20 in seven days
- Fed rate cut probability drops to 73% from 80%+ while no-change bets surge to 26% on prediction markets
- Eleven Fed Chair candidates under consideration by Trump administration could reshape monetary policy affecting crypto
The world’s largest cryptocurrency faces a pivotal moment as Bitcoin hovers near critical technical levels. BTC recently tested $114,707 after encountering selling pressure from profit-taking activities.
Market data reveals that August 16 witnessed the month’s most intense profit realization event. Over $3 billion in Bitcoin gains were converted to cash, creating immediate downward pressure on the asset’s value.
The selling activity pushed Bitcoin down 1.9% during intraday trading. This decline highlighted the cryptocurrency’s vulnerability to large-scale profit-taking behavior by institutional and retail holders.
Bitcoin’s current position sits precariously above a major technical threshold. The $116,963 level represents the largest concentration of investor cost basis in the entire Bitcoin network.
On-chain analytics show this price point holds over 700,000 Bitcoin tokens. This represents approximately 3.61% of the total circulating supply, creating a dense resistance zone.
Should this concentration break down, it could unleash cascading selling pressure. Investors holding at these levels may rush to exit positions to avoid deeper losses.
Technical analysts are eyeing $110,000 as the next logical support destination. This level offers more substantial buying interest compared to current intermediate support zones.
Institutional Interest Wanes as Market Dynamics Shift
Recent data indicates a marked decline in accumulation behavior among long-term holders. Bitcoin’s Accumulation Trend Score experienced its first orange classification this month.
The metric dropped sharply from 0.57 to 0.20 within a single week. This rapid deterioration signals reduced confidence among traditional Bitcoin stackers during price weakness.
Even at discounted valuations, institutional buyers are showing restraint. This departure from typical accumulation patterns during corrections suggests broader market caution.
The absence of aggressive buying creates an imbalanced order book structure. Selling interest currently outweighs purchasing demand across major exchanges.
Bitcoin’s 8% retreat from recent highs reflects this fundamental shift in market microstructure. Without strong bid support, the cryptocurrency remains vulnerable to further liquidation events.
Professional traders are noting the lack of FOMO buying typically seen during dip periods. This absence of retail enthusiasm compounds the current supply-demand imbalance.
Monetary Policy Expectations Create Additional Headwinds
Federal Reserve policy speculation is adding complexity to Bitcoin’s price discovery process. Market expectations for September rate adjustments have undergone revision.
Prediction market data shows declining confidence in immediate rate cuts. Polymarket participants reduced their September cut probability from above 80% to 73%.
Simultaneously, bets on unchanged monetary policy gained traction. No-change contracts jumped from 12% to 26% probability within seven days.
This shift in expectations undermines a key Bitcoin bull thesis. Many cryptocurrency investors positioned for fourth-quarter gains based on anticipated monetary loosening.
The evolving Fed narrative is removing a crucial tailwind for risk assets. Bitcoin particularly benefits from loose monetary conditions due to its inflation hedge characteristics.
Economist Alex Krüger suggests Bitcoin remains undervalued relative to future monetary policy changes. However, he emphasizes that full pricing won’t occur until Fed leadership clarity emerges.
President Trump faces the task of selecting Jerome Powell’s successor before May 2026. This decision carries enormous implications for cryptocurrency market dynamics.
Current reporting indicates eleven candidates remain under consideration. The shortlist includes prominent figures from major financial institutions and former Fed officials.
Names being discussed include David Zervos from Jefferies, Rick Rieder from BlackRock, and Larry Lindsey. Each candidate brings different monetary policy philosophies that could impact Bitcoin’s trajectory.
Some sources suggest Trump may accelerate the selection timeline. An earlier announcement could provide market clarity and potentially restart Bitcoin’s upward momentum.
The current Fed leadership has maintained a cautious approach to rate cuts. Powell’s replacement could adopt a more accommodative stance benefiting cryptocurrency valuations.
Market participants overwhelmingly expect rate cuts at the September 17 Federal Open Market Committee meeting. CME FedWatch data shows 83.9% probability for easing measures.
Coinbase Institutional research highlights substantial retail capital waiting on sidelines. Money market funds contain potential Bitcoin investment capital that rate cuts could mobilize.
