Bitcoin Drops Below $110,000: Market Reactions and Cause Analysis

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As of August 26, 2025, Bitcoin’s price has fallen to $108,700, representing a drop of about 12% from its recent high. Analysts attribute this decline to a combination of factors, including large investors unwinding positions, capital outflows, and weakening market sentiment.

Key Support and Resistance Level Analysis

Technical analysis indicates that Bitcoin may find support near $107,000, a level that previously acted as resistance and could now serve as a new support zone. If the price slips below this point, it may further drop toward the $100,000 level, which is close to the 200-day moving average and has historically been a high-volume trading area.

On the upside, $117,000 and $123,000 are recent resistance levels. Investors should watch for breakouts above these price points as indicators of a potential return to a bullish trend.

Liquidity Levels and Market Sentiment

Liquidity plays a critical role in Bitcoin’s price volatility. Around $110,000, the market remains highly liquid, which can lead to significant price swings. Investors should closely monitor capital inflows and outflows to evaluate whether prices are more likely to rebound or continue to decline.

Investor Strategy Recommendations

Short-term investors should pay close attention to the $107,000 and $100,000 support levels to evaluate rebound opportunities. Long-term investors might consider building positions in tranches during price pullbacks, but should remain mindful of market risks.