Bitcoin Under Bearish Siege: $112,000 Support Level Under Threat Amidst Surging Exchange Inflows Bitcoin (BTC) is currently grappling with significant bearish pressure, evidenced by a staggering $1.6 billion in liquidations over the past 24 hours, predominantly from long positions. Elevated inflows into cryptocurrency exchanges suggest a looming threat of further price declines, potentially pushing BTC below the crucial $112,000 support level.
The Dynamics of Exchange Inflows and Outflows
The cryptocurrency market has been experiencing heightened volatility, with Bitcoin recently tumbling from approximately $116,000 to as low as $111,800. This downturn coincides with broader market anxieties, including concerns surrounding a potential US government shutdown. Insights from CryptoQuant contributor PelinayPA reveal a critical shift in investor behavior. While late August and early September saw substantial BTC withdrawals from exchanges—a typical indicator of accumulation and bullish sentiment, leading to a price recovery—the current trend since September 20 paints a different picture. Exchange data now indicates that a growing number of investors are choosing to keep their Bitcoin on exchanges, a move often interpreted as preparation for selling. This sentiment was further underscored between September 17 and 19, when Bitcoin inflows to exchanges surged to nearly 40,000 BTC, preceding a price dip to the $117,000 mark. Such high inflows typically create short-term bearish pressure, as an increased supply on exchanges can outstrip demand, driving prices down.
A Critical Juncture for Bitcoin's Trajectory
The confluence of sustained high exchange inflows and relatively weak outflows signals continued short-term downside pressure for Bitcoin. The market's reaction to the US Federal Reserve's recent 25-basis-point interest rate cut has also contributed to the flagship cryptocurrency's recent price fall. The current situation presents a pivotal moment: should exchange outflows increase, indicating renewed investor accumulation, Bitcoin could find a strong rebound from the critical $112,000 zone. However, if inflows persist and outflows remain subdued, the risk of further downside momentum remains significant. Despite these immediate concerns, CryptoQuant CEO Ki Young Ju maintains a long-term bullish outlook, predicting BTC could potentially peak at $208,000 within the current market cycle, a stark contrast to the short-term challenges Bitcoin faces today, trading at $113,175, down 2.1% in the last 24 hours.
