Key takeaways:
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Bitcoin dip buyers are back, but still being overpowered by sellers in the futures and spot markets.
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Closed markets on the Labor Day holiday and the threat of selling by OG Bitcoin whales could send BTC price to $105,000 and below.
Bitcoin (BTC) trades amid rocky waters as the price struggles to hold above $108,000, and at the moment, there are no signs of a recovery in sight. Traders are exercising caution due to Wall Street being closed Monday for the Labor Day holiday and the overhang of a Bitcoin whale potentially unloading another billion-dollar tranche of BTC on the open market.
Notable transfers and selling from long-dormant whale-sized Bitcoin wallets and the conversion of the proceeds to Ether (ETH), declining inflows to the spot BTC ETFs, and end-of-week weakness in the DOW, S&P500, and Nasdaq are all weighing on investor sentiment. Adding to the pressure are US President Trump’s back-and-forth rhetoric on tariffs, and the markets’ reaction to the president’s attempts to take control of the Federal Reserve board.
Some longer-out positives are market participants’ expectations that the Fed will start cutting interest rates in late September or October, but these hopes have not been enough to improve short-term investor sentiment.
From a technical point of view, Bitcoin’s intraday price action continues to be primarily driven by activity in the perpetuals futures market, where the cumulative volume delta shows selling from the 10,000 to 10 million Binance cohort far outpacing buying in the spot and futures market at Binance and Coinbase.
While selling in futures continues to suppress Bitcoin price breakouts, and data shows short positions thickening up at each failed support resistance flip attempt, spot buyers in the retail-size cohort (100 to 10K) are buying each new low.
Related: Will Bitcoin price drop in September?
As shown in the chart below, the bid and ask ratio (set to 10% spot orderbook depth) shows buyers taking a bite as price dropped into the $112,000 to $111,000 zone on Aug. 19 to Aug. 22 and again as BTC descended to $107,200 on Friday through Sunday. It’s worth noting that prior to Aug. 19, the metric had not flagged an instance of the order book having more bids than sell orders since June 22, when BTC price fell below $98,000.
Bitcoin’s 30-day liquidation heatmap shows downside liquidity continuing to be absorbed, with the most prominent cluster at $104,000.
On a shorter time frame, the BTC/USDT 1-hour chart at TRDR.io shows bids showing up at $105,000, $102,600 and $100,000. Setting the order book to 10% depth, bids in the $99,000 to $92,000 zone are also present.
While buyers are proving keen to buy dips to new lows, orderbook liquidity combined with BTC price weakness favors downside and sellers continue to overpower dip buyers. Wall Street (and the spot BTC ETFs) will be closed on Monday, and the negative overhang of OG whales selling in the open market is likely to continue weighing on price in the short term.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.