Bitcoin price has dropped to $109,800 today, with traders and analysts debating whether this represents a classic “shakeout” before another vertical leg or the start of a deeper correction.
Over the last 24 hours, BTC has shed 2.7%, dragging its market cap down to $2.18 trillion, while the Ethereum price has slipped 5.5% to $4,336. Despite the red candles, daily trading volume spiked to $65B, suggesting that the latest move is anything but noise.
Why Bitcoin Price is Crashing
The broader macro backdrop has been supportive for risk assets, with Bitcoin ETFs continuing to draw inflows. Data from SoSoValue shows $178.9 million in net inflows into U.S. spot BTC ETFs on August 28, pushing cumulative inflows past $54 billion.
BlackRock’s IBIT alone added $63.7M, while Fidelity’s FBTC booked nearly $15M. Yet, the presence of heavy exchange transfers to market-makers has introduced near-term volatility.
On-chain metrics point to an interesting divergence. According to CryptoQuant, exchange reserves have fallen to 2.53 million BTC, their lowest level in years, suggesting that long-term holders are not the ones selling into this weakness.
Bitcoin Exchange Reserve Falling | CryptoQuant
At the same time, short-term holder metrics indicate that Bitcoin price is tapping the lower Bollinger Band on the MVRV oscillator at $109K, the same setup that preceded a 51% rally from $74K in April.
Traders Eye $105K Support, $118K Resistance
The Bitcoin price is currently at a crossroads. The daily chart indicates that BTC/USD has declined 6.8% over the past month, although it remains up 86% year-over-year.
TradingView’s technicals lean overwhelmingly bearish, with 13 sell signals vs. only 3 buy signals, and moving averages flashing “strong sell.” The 200-day EMA sits at $103,995, offering the next major line of defense if downside momentum accelerates.
Momentum oscillators, however, tell a softer story. The RSI has cooled to 40, nearing oversold territory, while the Stochastic RSI sits at 27, both hinting that sellers may be exhausting themselves.
Analyst Ali (@ali_charts) warned of a bearish divergence, noting that Bitcoin price is still making higher highs while RSI trends lower, a setup that preceded the 2021 cycle top.
Moreover, trader Ak47 highlighted the oversold MVRV band and drew parallels to April’s explosive rally. For bulls, reclaiming $113,000 would be the first step toward invalidating the bearish divergence, with the next resistance level near $118,000.
For bears, losing $105,000 could open the door to a sharper flush toward the $100,000 psychological level.
