Entering the Asian trading session on Tuesday (August 26), Bitcoin fell below the $110,000 mark, roughly returning to the level on January 20, the day Trump was inaugurated, currently down more than 11% from the historical high set less than two weeks ago. Other cryptocurrencies suffered even more severe declines, with Ether dropping 8% in the past 24 hours.

The rebound in cryptocurrencies on Monday could not be sustained, with prices quickly dropping again during U.S. afternoon trading. After the sharp decline over the weekend, the market had hoped for a quick rebound, but those hopes were dashed on Monday. Bitcoin's price fell back to $109,824, nearly equal to the euphoric price point of $109,400 reached before Trump's inauguration on January 20.

This largest cryptocurrency faced rapid pressure when attempting to rebound to $113,000 during U.S. trading hours, subsequently plunging to a seven-week low. According to CoinDesk's price data, Bitcoin is currently trading at $109,700, down 2.7% in the past 24 hours, having fallen about 7% since surging above $117,000 following the dovish remarks from Fed Chairman Powell at the Jackson Hole meeting last Friday.

According to market data from CoinDesk, Bitcoin is trading slightly below $110,000 after another rebound failed, having dropped about 7% since Powell's dovish remarks at the Jackson Hole meeting pushed it up to a high of $117,000. Ethereum briefly touched $4,900 before sharply retracing and is currently holding above $4,300, but has shown signs of fatigue after outperforming the market for several weeks.

Despite most mainstream altcoins holding up relatively well during Sunday’s sharp decline, they still could not withstand the market's weakness on Monday. Ethereum (ETH) plummeted nearly 8% within 24 hours, falling below $4,400. Solana (SOL), Dogecoin (DOGE), ADA, and LINK also fell by 6%-8%.

CoinGlass data shows that the price fluctuations on the day led to approximately $700 million in cryptocurrency derivatives leveraged positions being liquidated across the market, exceeding the scale of Sunday. About $627 million of that was long positions betting on price increases.

What worries traders even more is that seasonal weakness is becoming evident as the end of August approaches. CoinGlass data shows that September has historically been the worst month for Bitcoin and Ethereum, averaging declines of 3.77% and 6.42%, respectively.

Seasonal weakness in Bitcoin is evident.

Market observers say that with tightening liquidity, ETF fund outflows, weak on-chain activity, and retail long positions being liquidated, cracks are appearing in this bull market. But beneath the surface, sovereign funds and institutions are quietly taking advantage of volatility to allocate billions, creating a stark contrast between short-term confidence issues and long-term capital accumulation.

Glassnode's latest Market Pulse indicates that the current cycle is sliding from euphoria to fragility: spot momentum is weakening close to the oversold zone, and ETF funds have turned into a net outflow of $1 billion, bringing profits back to breakeven levels.

This fragility is confirmed in QCP Capital's analysis, which attributes the weekend's crash to an early holder selling 24,000 Bitcoins in an illiquid environment, triggering $500 million in liquidations. QCP points out that this sell-off exposed the market's vulnerability: while $1.2 billion flowed out of ETFs, whale funds shifted to Ethereum, pushing the ETH/BTC ratio above 0.04.

Enflux, a Singapore-based market maker, also pointed out that not all capital flows are the same. Retail long positions were washed out, but a $2.55 billion Ethereum position was established through a single contract, and the UAE royal family established a $700 million Bitcoin position through Citadel Mining, which is more like long-term allocations by sovereign and institutional players rather than speculative operations.

In other words, although Glassnode's on-chain data shows that address activity and transaction fee volumes are weakening, there are still counterparties intentionally taking advantage of volatility to accumulate large positions. The result is a divergence: retail leverage continues to be cleared while long-term capital quietly accumulates.

However, as trading fees have fallen to near a decade low and blockchain congestion has eased, liquidity on the Bitcoin blockchain itself appears thin. This poses a problem for miners facing pressure from halved rewards and prepares the broader market for consolidation or even deeper corrections in September—historically the worst month for Bitcoin performance.

Bitcoin Technical Analysis

Bitcoin's price began a new downward trend after closing below the $113,500 level. BTC gained bearish momentum, falling below the $112,000 support zone. The price further dropped below the $110,000 support zone and the 100-hour simple moving average, testing the $108,750 area. The lowest point formed at $108,734, and the price is currently attempting to rebound, having recovered above $109,500, but is still below the 23.6% Fibonacci retracement level of the drop from the high of $117,354 to the low of $110,692.

Currently, Bitcoin is trading below $112,000 and below the 100-hour simple moving average. The immediate resistance level to the upside is around $110,750, with the first key resistance level around $112,500. A key descending trendline has also formed on the BTC/USD hourly chart, with resistance at $112,500. The next resistance may be at $113,000 or the 50% retracement level from the high of $117,354 to the low of $110,692. If it can close above the $113,000 resistance level, the price may rise further. In that case, the price could increase and test the $114,500 resistance. If it breaks through again, it may further target the $115,500 level, with the main target potentially being $116,500.

If Bitcoin fails to break through the $112,000 resistance zone, it may initiate a new round of declines. Immediate support is around $108,500, with the first major support level near $107,200. The next support level is in the $106,500 area; if it continues to decline, the price may test the $105,500 support in the short term. Major support is at $103,500; if it breaks below that level, BTC may accelerate downward.

Technical Indicators:

Hourly MACD: The MACD is accelerating in the bearish zone.

Hourly RSI (Relative Strength Index): The RSI for BTC/USD is currently below 50.

Major support level: $108,500, followed by $107,200.

Major resistance levels: $110,500 and $112,500.