Bitcoin just took a hit, sliding to $112,000. But if you were brave enough to buy the dip, you might be sitting on a smart decision. Behind the scenes, charts and metrics are flashing some of the clearest bullish signals we’ve seen in weeks.
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Let’s break down why this pullback might have just been the reset Bitcoin needed.
Bitcoin Chart Pattern Points to $126K Target
The market is following what traders call a “Power of 3” setup. That means there are three stages happening right now: accumulation, manipulation, and distribution.
In simple terms, Bitcoin first settled into a tight range between $119,500 and $115,300. That was the accumulation stage, where smart money builds quiet positions. Then came a sudden drop to $112,000. This is what traders call manipulation, because it is a sharp move that pushes out over-leveraged buyers and triggers forced selling.
If Bitcoin now climbs back above $115,300 and holds it, we move into the final phase: distribution. In this case, distribution doesn’t mean selling; it means lifting higher. Chart watchers are pointing to $126,000 as the next stop, which lines up with recent resistance levels.
Big Liquidations Cleared Out the Risk
On August 1, more than $922 million in leveraged crypto positions were wiped out. Of that, $240 million came from Bitcoin futures alone.
This matters because it reduces risk in the system. When too many traders are borrowing heavily to go long, the market becomes unstable. A liquidation flush like this one clears the decks. Now, the market can rebuild from a cleaner base with less downside pressure.
Bitcoin’s Support Levels Are Holding Steady
Bitcoin didn’t just fall randomly. It dropped into a technical range between $115,200 and $112,000. This zone was already marked as a fair value gap on long-term charts. That just means it was an area where price moved too fast before, leaving behind an imbalance.
Now, price has filled that gap and bounced. That tells us the sell-off may have been more mechanical than emotional. Support did its job, and Bitcoin is showing signs of life again.
Retail Sentiment Looks Washed Out
Funding rates on platforms like Binance and Deribit have flipped negative. That means short sellers are paying a fee to keep their trades open. When that happens, it usually means the crowd is leaning too far bearish.
At the same time, taker volume on Binance dropped below minus $1.5 billion, which is a level last seen in July. That tells us there was heavy selling pressure from people aggressively hitting market sell buttons. But that kind of panic often signals a local bottom.
$120K Bitcoin Price Looks Like the Next Battle
There’s a big liquidity zone sitting around $120,000. That means a lot of traders have placed orders there, and price tends to gravitate toward that kind of level. Technical analyst Michaël van de Poppe said breaking above that area is “a good first step” toward new highs.
He also pointed to $114,800 and $116,800 as key zones to flip. If Bitcoin can climb above those numbers and stay there, the case for a bigger rally gets stronger.
At the time of writing, Bitcoin is sitting at $114,923.25.
