Bitcoin is currently trading at around $111,500, slightly down after testing the $110,900 area on Wednesday. The recent pullback reflects the dual impact of seasonal weakness and ongoing ETF fund outflows, causing traders to remain cautious ahead of September.
Historically, August and September are among the weakest months for Bitcoin, with an average return of -3.7% in September, according to Coinglass. However, there are differing views in the market: some believe this is the last shakeout before a strong fourth quarter, while others worry that if support levels are broken, Bitcoin could face larger declines.
With whale movements, sovereign mining developments, and technological integrations, Bitcoin is approaching a critical decision point. The coming days may determine whether bulls can stabilize above $110,000 or if sellers will force prices down further.
Bitcoin price remains firm near the support level of the downtrend channel.
On the daily chart, BTC has held the lower boundary of the upward channel, anchored around $110,800 - $111,000. This level also coincides with the 100-day EMA at $110,793, providing a technical cushion for bulls.
Momentum has weakened. The RSI is at 41.8, reflecting a decrease in bearish sentiment after the pullback from the July high. The MACD remains below the signal line, highlighting that upward pressure is diminishing. On the 4-hour chart, BTC price is constrained by the downtrend line near $113,900, with super trend resistance above.
BTC has fallen nearly 10% since early August, consistent with seasonal patterns. August and September are the worst-performing months for Bitcoin, while October and November perform the best. This seasonal chart reinforces the risk of BTC potentially declining before a strong recovery in the fourth quarter.
ETF fund outflows and whale behavior dampen market sentiment.
Capital flow remains negative. Data from Coinglass shows that on August 27, there was a net outflow of $35 million in Bitcoin, continuing the trend of negative inflows for most of August. Ongoing selling pressure from US spot ETFs limits the potential for subsequent upward movement, while long positions being liquidated continue to weaken short-term bullish positions.
Bitcoin's dominance remains at 58%, stable amidst further weakness in altcoins. This indicates that risk appetite is contracting towards BTC, but is not enough to trigger a rebound. On the contrary, the stability of dominance highlights the defensive positioning of the entire market.
From a fundamental perspective, the accumulation by sovereign wealth funds remains an emerging driver. The UAE recently confirmed it holds 6,333 bitcoins (worth $700 million) through Citadel Mining, as part of its broader initiative to diversify wealth and reduce dependence on the dollar. Even with recent ETF fund flows moving in the opposite direction, this accumulation by sovereign wealth funds still has a positive long-term impact.
Contrasting views: Bulls are optimistic for $120,000, while bears warn of $108,000.
The bullish scenario depends on whether BTC can hold the $110,000 level and re-enter the mid-range area between $115,000 and $118,000. A decisive breakout of the up and down trendlines on the 4-hour chart would indicate that BTC could rebound to the next psychological threshold of $120,000.
Bears believe that repeated resistance near $114,000 and the weakening RSI increase the likelihood of retesting the support level at $108,000. A drop below $108,000 would place the 200-day EMA at $103,800, which would be a deeper bottom line for long-term trend followers.
Currently, market positioning indicates a balance: September's downside risk still exists, but macro fund inflows from sovereign participants and potential seasonal recovery in the fourth quarter keep long-term sentiment positive.
Bitcoin short-term outlook: Range trading before the September test.
In the next 24 hours, Bitcoin may consolidate between $110,000 and $113,500, reflecting indecisiveness before September fund inflows. Due to the RSI being in the oversold territory on lower time frames, a short-term rebound may occur, but trendline resistance will limit upward momentum.
In the coming week, traders should watch whether BTC can hold above $110,000. If it can strongly rebound above $115,000, it will open the door to $118,000 to $120,000; conversely, if it fails to break through, it may drop to $107,000 to $108,000. Seasonal data shows that volatility will increase, and September has historically been one of the weakest months for BTC.
