Core Points:
The Coinbase premium index is positive, indicating that U.S. retail investors are actively buying the dip.
Strong inflows into ETFs are boosting the potential for a BTC rebound, supported by Bitcoin custody companies.
Despite ongoing bearish pressure, the risk of liquidation events is decreasing.
Bitcoin has dropped from a high of about $118,000 this month, with a maximum decline of 5.5%, hitting a low of $111,571 during Tuesday's trading. Although this is only a 10.4% pullback from the historical high of $124,500, several indicators suggest that the $112,000 to $115,000 range may represent a local bottom before a BTC rebound.
From September 1 to Thursday, Bitcoin rebounded from a low of $107,400 to a four-week high of $118,000, partly due to increased demand from U.S. retail investors. During this period, the Coinbase premium index rose significantly, showing particularly strong performance.
The Coinbase premium index measures the price difference between BTC/USD on the largest U.S. exchange, Coinbase, and BTC/USDT on Binance.
The index has remained positive, rising from 0.043 to 0.075 on Monday, despite Bitcoin dropping 4% to $112,000.
Analyst BTC_Chopsticks stated on the X platform on Monday: "The Coinbase premium has remained positive this week," even amid the latest sell-off, adding:
The rise in the Coinbase premium indicates increased demand from U.S. retail investors.
Additionally, on-chain data shows that despite the price drop yesterday, Bitcoin demand remains high and has slightly increased over the past 24 hours.
This suggests that new investors are continuously entering the market, providing momentum for a BTC price rebound.
The potential for a BTC rebound is driven by increased institutional demand, with strong inflows into Bitcoin-related investment products.
According to CoinShares data, institutional investors increased their holdings in Bitcoin investment products, with inflows of $977 million last week, accounting for over 51% of total inflows.
SoSoValue data shows that the U.S. spot Bitcoin ETF had a net inflow of $876 million last week.
Bitcoin custody companies continue to accumulate significantly, with Japan's Metaplanet acquiring 5,419 BTC, worth $632.53 million, becoming the fifth-largest Bitcoin holder, with a total holding of 25,555 BTC, valued at nearly $3 billion.
Michael Saylor's Strategy added 850 BTC last week, worth $99.7 million, bringing the total holding to 639,835 BTC.
According to trading firm QCP Capital in a report to investors on Tuesday: "Despite weak short-term performance, institutional support remains strong," and added:
QCP Capital also noted that traders are positioning for October, "historically the strongest month for BTC, with active demand for $120K–$125K call options."
Since mid-July, there has been persistent selling pressure in the Binance derivatives market, but Bitcoin has largely remained in the $110,000 to $120,000 range. Cumulative volume delta (CVD) data has remained negative, indicating that the market is still dominated by bears.
The lack of significant price declines suggests that the market has a certain capacity to absorb selling pressure, showing signs of continued accumulation.
As liquidation data indicates a reduction in downward pressure, this structural resilience is expected to strengthen further.
According to Bitcoin researcher Axel Adler Jr, although there was a large-scale long liquidation on Monday, indicating that bears dominate the market, the frequency of liquidations remains low, and he added:
The risk of further bearish pressure from liquidations is medium. Net liquidations remain negative near -$40 million, reflecting ongoing long wipeouts and keeping downside pressure in place. Yet the Liquidation Intensity Z-Score (365d) is neutral/moderate, suggesting no cascade risk for… pic.twitter.com/FRu9spsyCZ
The high demand from U.S. retail investors, strong institutional support, and reduced liquidation risk further confirm that Bitcoin is forming a bottom around $112,000.
Although short-term volatility may persist, potential buying pressure from institutional funds is expected to reduce the risk of a severe correction below this price level.
Related: Ethereum at a Critical Moment: ETH Price Pattern Breaks, $4,000 Becomes the Last Line of Defense
This article does not contain any investment advice or recommendations. All investment and trading activities involve risks, and readers should conduct their own research before making decisions.
Original article: “Is the Bottoming Opportunity Here? Multiple Indicators Show $112K as a Local Bottom for Bitcoin (BTC)”
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