As on August 15, 2025, Bitcoin ($BTC) is trading at $117,701.96, reflecting a 3.24% decline from its recent all-time high of $124,474. The recent sell-off, driven by hotter-than-expected US PPI data (3.3% vs. 2.5% expected) and broader market jitters, has pushed BTC into a dip that could be a golden opportunity for traders. With volatility spiking and markets on edge, a limit long setup is emerging, offering a calculated chance to capitalize on a potential bounce. Let’s break down the setup, the rationale, and the key levels to watch for a high-probability trade.
The Setup: Key Levels and Strategy
Entry Price: $115,840
This level aligns with a critical support zone, combining the 50-day EMA (approximately $115,750) and a prior liquidity pool from mid-July consolidation. Entering here targets a high-probability bounce as buyers are likely to step in to defend this technical confluence. The price is just 1.6% below the current level, making it a realistic limit order for a dip-buying strategy.
Target Price: $126,920
The target aims for a retest of the recent all-time high and a potential breakout above it, representing an 8.6% upside from the entry point. This level aligns with the 1.618 Fibonacci extension drawn from the recent swing low ($95,000) to the all-time high ($124,474). Historically, BTC tends to target Fibonacci extensions after strong support holds, especially in bullish macro environments.
Stop Loss: $114,420
Placed 1.2% below the entry, this stop loss sits just below the 50-day EMA and the psychological $115,000 level, protecting against a deeper breakdown. It accounts for potential volatility and liquidity hunts while maintaining a tight risk-to-reward ratio of 1:7.6 (risking $1,420 to gain $11,080 per BTC).
Why This Setup? The Technical and Fundamental Case
The current dip follows an impulsive sell-off, but several indicators suggest a reversal could be brewing:
Technical Support Confluence:
The $115,840 entry aligns with the 50-day EMA, a dynamic support that has held firm during previous pullbacks in 2025.
The 0.618 Fibonacci retracement level (from the $95,000 low to $124,474 high) sits nearby at $116,200, adding weight to this zone as a reversal point.
The H4 chart shows a potential higher low forming near $115,840, with early signs of bullish divergence on the RSI (Relative Strength Index), where price declines are not matched by weakening momentum.
Market Context:
The sell-off was triggered by macroeconomic fears, particularly the 3.3% PPI reading signaling persistent inflation, which has dampened hopes for a Federal Reserve rate cut in September. However, BTC’s resilience above the 50-day EMA suggests institutional buyers are absorbing dips, a hallmark of bull market behavior.
Declining futures Open Interest (OI) post-sell-off indicates liquidations have flushed out overleveraged longs, potentially clearing the path for fresh buying pressure.
Price Action Signals:
The recent drop appears impulsive (sharp and high-volume) rather than corrective, suggesting a liquidity grab targeting stops below $120,000. However, the lack of follow-through selling and stabilization near $117,700 hints at exhaustion among bears.
A break above $118,500 (the 20-day EMA) on the 4-hour timeframe would confirm bullish momentum, with lower timeframes (1-hour/15-minute) likely flipping to higher highs and higher lows first.
Risk Management and Trade Execution
Position Sizing: With a stop loss of $1,420 per BTC, traders should size their position to risk no more than 1–2% of their portfolio. For example, a $10,000 account risking 1% ($100) could buy 0.07 BTC at $115,840.
Confirmation: Wait for a 4-hour candle close above $115,840 with increasing volume to validate the entry. Alternatively, a bullish candlestick pattern (e.g., hammer or engulfing) on the 1-hour chart near this level can add confidence.
Scaling Out: Consider taking partial profits at intermediate resistance levels, such as $120,000 (psychological level) and $123,000 (prior high), to lock in gains while leaving a portion for the full $126,920 target.
Potential Scenarios and What to Watch
Bullish Case (Bounce): If BTC holds above $115,840 and breaks $118,500, expect impulsive upward moves with corrective pullbacks to the $116,000–$117,000 range. A surge in volume and a flip of the 20-day EMA ($118,500) would confirm the setup, targeting $126,920 in 1–2 weeks.
Bearish Case (Trap): A decisive break below $114,420, especially with high volume, could signal a deeper correction toward the 100-day EMA ($108,000) or even the 200-day EMA ($98,000). In this case, the stop loss limits downside exposure.
Volatility Risks: With markets reacting to PPI and awaiting the PCE report on August 29, expect potential liquidity hunts below $115,000 or spikes toward $120,000. Monitor lower timeframes for false breakouts.
Broader Market Context
Bitcoin’s dip aligns with broader market volatility, as stocks (S&P 500 down 0.5%) and altcoins (e.g., BNB correcting from its ATH) react to inflation fears. However, BTC’s ability to hold above the 50-day EMA and its macro uptrend (higher highs since Q1 2025) suggest this could be a short-term shakeout rather than a trend reversal. Institutional accumulation, evidenced by rising spot market inflows, further supports the bullish case for a bounce.
Trader Takeaway
This limit long setup at $115,840 offers a high-probability chance to ride a Bitcoin bounce with a stellar risk-to-reward ratio. The confluence of the 50-day EMA, Fibonacci support, and potential bullish divergence makes this a textbook dip-buying opportunity. Stay disciplined—watch for confirmation signals, manage risk tightly, and be ready for volatility as the market digests macro pressures. If executed well, this trade could catch the rocket before it launches back toward $126,920.