Will Bitcoin Rise to $118K or Drop to $105K First? A Dive into Market Signals

Overview

• Retail traders are buying the dip, but whales and institutions continue to exert selling pressure, capping recovery momentum.

• ETF inflows returned after BTC dipped below $110K, yet institutional conviction remains weak compared to retail optimism.

• Support at $110K, resistance near $118K, and risk of a deeper move toward $105K if selling continues.

Bitcoin is once again at a crossroads. After a sharp sell-off earlier this week that drove prices as low as $108,665, the world’s largest cryptocurrency has rebounded to $110,000, but the path ahead remains unclear. With traders split on whether BTC could retest $118,000 resistance or plunge toward the $105,000 liquidity cluster, market data paints a complex picture.

Bitcoin and Ethereum Attempt a Recovery

Analysts release new Bitcoin Price Prediction reports almost daily. At the time of writing, Bitcoin (BTC) is trading at $110,000, down about 2.4% in the last 24 hours. Meanwhile, Ethereum (ETH) is down more than 5% from its recent daily high of $4,515, compared to its Monday low of $4,310.

Recent BTC Whale Selling has caused volatility across exchanges. Both assets are attempting to stabilize, but BTC’s sluggish recovery compared to ETH highlights persistent sell pressure.

Retail Traders vs. Whales: A Clear Divide

Strong Bitcoin ETF Inflows suggest rising institutional interest. The Anchored Cumulative Volume Delta (CVD) reveals how different trader cohorts behaved during the correction.

• Retail and Mid-size Traders ($1K-$10K orders): Net buyers across both spot and perpetual futures markets, showing confidence in buying the dip.

• Whales and Institutional Investors ($1M-$10M orders): Net sellers, consistently offloading positions even as prices stabilized.

Traders closely watch BTC Liquidation Levels to avoid heavy losses. This divergence suggests that while smaller investors see current levels as attractive, larger players remain cautious, limiting Bitcoin’s upside momentum.

Exchange-Level Data Confirms the Split

Data from major exchanges strengthens this narrative. On Coinbase, retail traders accumulated $101.25 million worth of BTC, while institutional players offloaded positions. 

Similarly, Binance’s perpetual futures markets recorded net selling from large traders worth roughly $7.5 billion during the correction window.

Also Read: Bitcoin Price Slides From $124K High to $111K: Bull Trap or Correction?

Bitcoin Derivatives Data: Weakness Persists

Bitcoin’s derivatives markets also suggest caution:

• Futures Volume: Down 14.81% to $70.55 billion.

• Open Interest: Slipped 1.25% to $80.58 billion.

• Options Activity: Options volume rose 11.92% to $4.40 billion, with open interest marginally up by 0.47% to $56.99 billion.

These figures reflect declining futures speculation alongside growing interest in options, potentially signaling hedging activity against further downside.

Interestingly, the long/short ratios indicate a retail-leaning bullish stance. For example, Binance’s top trader accounts show a ratio near 1.95, indicating more longs than shorts. 

Yet, the aggregate long/short position for the broader market sits close to 0.96, indicating a neutral-to-bearish stance, which again points to a misalignment between retail optimism and broader market caution.

ETF Flows Highlight Institutional Hesitation

ETF data further shows this divide. On August 25, US-listed Bitcoin ETFs saw $219 million in net inflows, signaling strong demand. Positive flows continued on August 26 ($88.2 million), August 27 ($81.25 million), and August 28 ($178.9 million).

However, these gains only partially offset the heavy outflows earlier in the month, including $523.3 million on August 19 and $311.5 million on August 20.

The pattern suggests that investors remain cautious, with inflows returning only after Bitcoin tested sub-$110,000 levels. ETF buyers are stepping back in, but institutional conviction is still fragile compared to retail enthusiasm.

Liquidation Heatmap: Key Levels Ahead

The CoinGlass liquidation heatmap provides critical insight into where BTC could move next:

• Support Clusters: Between $111,000-$110,000, where bids absorbed the weekend sell-off.

• Lower Liquidity Zone: Around $104,000-$105,000, representing the next cluster if selling pressure intensifies.

• Resistance Zone: $117,000-$118,000, where Bitcoin last reached its peak before sliding lower.

Given these levels, a push above $113,000-$115,000 could pave the way for a test of $118,000, while continued whale selling risks dragging BTC toward $105,000.

Investor Sentiment: Misaligned with Market Structure

The misalignment between retail enthusiasm and institutional caution is the defining feature of the current market. Smaller traders believe BTC is undervalued and are betting on a quick recovery. In contrast, larger players remain net sellers, weighing heavily on the trend.

This divide creates a volatile setup; any easing in whale selling could spark a sharp rally, but if large outflows continue, BTC may struggle to hold above $111,000.

Also Read: MicroStrategy's Bitcoin Strategy: Will a Price Surge Raise its Valuation?

Outlook: $120K or $105K First?

In the short term, Bitcoin is likely to remain range-bound between $110,000 and $115,000, with volume and inflows deciding the breakout direction.

• Bullish Case: If retail conviction aligns with reduced whale selling, BTC could reclaim $118,000 and target $120,000.

• Bearish Case: Continued institutional unloading and low futures volumes could open the door to a retest of the $105,000 cluster.

Traders should monitor cumulative volume delta (CVD) trends and derivatives open interest as leading indicators of whether sentiment is shifting in favor of the bulls or bears.

Final Thoughts

Bitcoin’s next major move depends less on retail traders who are already committed and more on whether whale and institutional selling pressure subsides. If it does, the long-awaited rally toward $118K-$120K could materialize. If not, the $105K zone looms as the next critical test.

Until then, the market remains in a tug of war between conviction buyers and cautious sellers.

FAQs

1. Why is Bitcoin struggling to recover despite retail buying?
Whales and institutional investors are still net sellers, outweighing retail demand.

2. What do ETF flows suggest about Bitcoin sentiment?
ETF inflows turned positive after BTC dipped below $110K, showing cautious optimism but fragile institutional confidence.

3. What are Bitcoin’s critical support and resistance levels now?
Support is around $110K-$111K, resistance is near $117K-$118K, with a risk zone around $105K.

4. What role are derivatives playing in Bitcoin’s current trend?
Futures volume is shrinking while options activity is rising, suggesting traders are hedging against downside risks.

5. Will Bitcoin hit $118K or $105K first?
It depends on whale selling vs. ETF inflows. Reduced sell pressure could drive BTC to $118K, but renewed outflows risk $105K.