Bitcoin recently dropped below $113,000, causing a shock in the market. The drop of over 8% from the peak of $124,000 has triggered a wave of pessimism among retail investors. However, behind this apparent panic, some analysts see a contrary signal that may indicate a reversal.
Bitcoin's Severe Adjustment… But Not Without Precedent
After dropping below $115,000, Bitcoin fell to $112,000 on August 19, 2025, marking one of the strongest corrections in months. Social media reacted sharply: cryptocurrency forums were flooded with alarming messages, and retail investors began to liquidate their positions in a widespread atmosphere of fear.
According to data from Santiment, retail investor sentiment has become 'super pessimistic', reaching the most negative level since June. This extreme pessimism is often understood as a potential reversal indicator, especially when fundamental factors remain solid.
Bitcoin: When Institutions Buy While Retail Investors Panic
While individual investors react emotionally, institutions take a strategic stance. Investors like Strategy have taken advantage of the downturn to strengthen their position by purchasing an additional 430 BTC, worth $51.4 million. They are betting on a medium-term recovery.
This contrast illustrates a well-known dynamic: When investors sell out of fear, whales buy in silence. Historical precedent supports this hypothesis. In 2017, Bitcoin dropped 36% in September before reaching a new peak three months later. In 2021, a similar drop was followed by a rally.
Technical Analysis of BTC: Between Tension and Recovery Hope
Some technical indicators show that the bitcoin situation is unstable, but not to the point of desperation. Indeed:
RSI at 41 remains in neutral territory, creating a gap before being oversold;
Negative MACD indicates downward momentum but no sudden collapse;
The 50-day moving average at $115,870 acts as a resistance level;
The forming head and shoulders pattern could trigger a breakout of BTC to $108,000, or even $105,150 if the support at $112,000 is broken.
Bitcoin Price Drop Trap: What Happens If the Drop Is a Trap?
This setup may correspond to a 'Bear Trap' for bitcoin, a bearish trap when the market mimics a negative trend to encourage selling… just before prices recover.
According to Ryan Lee, chief analyst at Bitget, this decline could be a false bearish signal:
If the $112,000 level holds as support, this could truly be the starting point for a new bullish trend, rather than a market reset.
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The pessimistic sentiment of retail investors, the accumulation of institutions, and the technical support holding reinforce this hypothesis. Therefore, Bitcoin investors should not panic. They should monitor weak signals and think long-term.
Thus, Bitcoin dropping to $113,000 is not necessarily the start of a bear market. It could be a strategic pause, signaling a new bullish cycle for those who know how to read the market. However, the specter of October is looming, and BTC may drop to $100,000.
