Bitcoin has just dropped below the $113,000 level, causing a shock in the market. The drop of more than 8% from the peak of $124,000 has made retail investors pessimistic. However, behind this panic, some analysts see a contrary signal that could indicate a reversal.

Severe adjustment of Bitcoin... But not unprecedented.

After falling below $115,000, Bitcoin dropped to $112,000 on August 19, 2025, marking one of the strongest corrections in recent months. Social media reacted strongly: the cryptocurrency forum was flooded with alarming messages, and retail investors began to liquidate their positions in a climate of widespread fear.

According to data from Santiment, retail investor sentiment has become 'extremely bearish', reaching the most negative level since June. This extreme pessimism is often interpreted as a potential reversal indicator, especially when the fundamentals remain strong.

Extremely bearish sentiment from investors.

Bitcoin: When Institutions Buy While Retail Investors Panic.

While individual investors react emotionally, institutions take a strategic view. Investors like Strategy have seized the opportunity during the downturn to strengthen their positions by purchasing an additional 430 BTC, worth $51.4 million. They are betting on a mid-term recovery.

Strategy has purchased an additional 430 bitcoin.

This contrast illustrates a notable dynamic: When retail investors sell out of fear, whales buy quietly. Historical precedent supports this hypothesis. In 2017, Bitcoin dropped 36% in September before reaching a new peak three months later. In 2021, a similar decline was followed by a price surge.

Technical Analysis of BTC: Between Tension and Hope for Recovery.

Some technical indicators show that bitcoin's situation is unstable, but not to the point of despair. In fact:

RSI at 41 remains in neutral territory, creating a gap before overbought;

Negative MACD indicates downward momentum but no sudden collapse;

The 50-day moving average at $115,870 acts as a support level;

The head and shoulders pattern forming could trigger a BTC breakdown to $108,000, or even $105,150 if support at $112,000 is breached.

The Bear Trap of Bitcoin: What Happens If the Decline Is a Trap?

This setup could correspond to a 'Bear Trap' for bitcoin, a downward trap when the market simulates a negative trend to encourage selling... just before the value increases again.

The Bear Trap of Bitcoin.

According to Ryan Lee, a leading analyst at Bitget, this decline could be a false bearish signal:

If the $112,000 level holds as support, this could really be the starting point for a new bullish trend, rather than a market reset.

The bearish sentiment of retail investors, the accumulation by institutions, and the strong technical support reinforce this hypothesis. Therefore, Bitcoin investors should not panic. They should monitor weak signals and think long-term.

Therefore, Bitcoin dropping to $113,000 is not necessarily the beginning of a bear market. It could be a strategic pause, a signal for a new bullish cycle for those who can read the market. However, memories of October are looming, and BTC could drop to $100,000.

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