Urgent: Bitcoin Price Cools, $112K Becomes Crucial BTC Level

The cryptocurrency world watches closely as Bitcoin’s remarkable ascent shows signs of cooling. After a period many described as euphoric, the Bitcoin price recently dipped, signaling potential market exhaustion. This shift has investors wondering: what’s next for the leading digital asset?

Unpacking Bitcoin’s Euphoric Phase and Current Exhaustion

Bitcoin recently experienced a significant rally, pushing its price to an impressive $124,500 all-time high. This surge placed 100% of Bitcoin supply into profit, a clear indicator of a “euphoric phase.” However, sustaining such periods demands continuous, strong capital inflows. These inflows must consistently offset persistent profit-taking by early investors. Historically, such conditions rarely last long in the crypto market.

Glassnode, a prominent market intelligence firm, tracks this behavior closely. They use the 0.95 quantile cost basis, a threshold where 95% of the supply is in profit. Bitcoin’s most recent euphoric phase extended for approximately 3.5 months, maintaining over 95% of its supply in profit. Nevertheless, the market saw a reversal. Bitcoin fell below this critical band on August 19, suggesting demand finally showed signs of exhaustion.

Key Metrics Point to Bitcoin Exhaustion

Currently, about 90% of Bitcoin’s supply remains in profit. This figure falls within the 0.85 and 0.95 quantile cost basis, corresponding to a price range of $104,100–$114,300. Historically, this zone acts as a consolidation corridor after euphoric peaks. It often leads to a choppy, sideways market.

Consider these key observations:

• A break below $104.1K could replay post-ATH exhaustion phases seen earlier in this cycle.
• Conversely, a recovery above $114.3K would signal renewed demand. This would confirm buyers are regaining control of the trend.
• The percentage of short-term holder supply in profit also collapsed. It dropped from over 90% to just 42%. This sharp decline represents a textbook cooling-off for the BTC price.

Glassnode further explained that such sharp reversals typically provoke fear-driven selling. These sales often come from top buyers. This selling is then frequently followed by exhaustion from the very same sellers. This pattern highlights the volatile nature of short-term market movements, indicating significant Bitcoin exhaustion.

Why $112,000 is a Crucial BTC Price Level

Following the recent drop to $107,000, Bitcoin has seen a modest rebound. The Bitcoin price now hovers around $112,000. This recovery has brought over 60% of short-term holder supply back into profit. However, this comeback remains fragile. According to Glassnode, a sustained recovery above $114K–$116K is necessary. This would see over 75% of short-term holder supply return to profit. Such a move could provide the confidence needed to attract new demand. It would then fuel the next leg higher for Bitcoin.

The $112,000 mark has proven to be a significant resistance level. Bitcoin’s relief rally stalled at this point multiple times this week. This indicates that bears are aggressively defending this price. The price faces stiff resistance from the $111,700-$115,500 supply zone. This zone also aligns with the 100-day Simple Moving Average (SMA) and the 50-day SMA.

Navigating the Technical Landscape for Bitcoin

For the correction to end, bulls must successfully turn this resistance area into new support. Failure to do so risks further downside in the near term. Trader and analyst Daan Crypto Trades noted on X (formerly Twitter) that Bitcoin has been consolidating below its previous local range. It has also failed to retake it. He further stated, “A move back above $112K and holding there would be good in the short term.” This sentiment underscores the importance of this specific market analysis point.

Furthermore, the 20-day exponential moving average (EMA) at $112,438 presents stiff resistance. Bitcoin price must overcome this level to confirm higher lows. Such a move would strongly suggest the corrective phase may be over. The BTC/USD pair could then attempt a rally toward its all-time highs. Investors should monitor these technical indicators closely. They offer valuable insights into potential future price action.

Conclusion: What Lies Ahead for the Crypto Market?

The current crypto market landscape for Bitcoin is one of cautious optimism mixed with significant resistance. While the “euphoric phase” has cooled, the underlying demand remains. The key lies in Bitcoin’s ability to decisively reclaim and hold the $112,000-$116,000 range. This would signal renewed strength and the potential for another upward trend. However, a failure to do so could lead to further consolidation or even deeper corrections. Therefore, close monitoring of these critical price levels and market metrics is essential for all participants.