Bitcoin (BTC-USD) Holds $116K Ahead of Breakout: ETF Surge, UK Sale, and $125K Target in Play

BTC-USD Holds $116K as Bulls Eye Breakout Toward $125K

Bitcoin (BTC-USD) remains locked in a high-stakes consolidation zone, trading just below $118,500 after peaking at an all-time high of $123,000 earlier this month. The market is digesting gains from a parabolic leg that began near the $88,000 mark, fueled by ETF inflows and spot demand. However, technical exhaustion and heavy sell-side liquidity near the ATH have forced BTC into a sideways grind between $116K and $123K, forming a symmetrical triangle with narrowing volatility and tension.

The triangle’s base is anchored at $116,000, which aligns with key hourly support and multiple touches in the 4-hour structure. Price remains coiled under a defined descending resistance line, currently sloping down from the $123K peak. Momentum traders are watching this formation closely; any decisive breakout above the descending trendline could trigger a breakout toward $125,000, while a failure to hold the ascending base may expose $111,000 and even $107,000.

BTC Faces Fibonacci Confluence at $111K–$114K Ahead of Next Impulse

Bitcoin’s correction risk remains intact, particularly with short-term structure signaling a retracement toward the 0.5–0.618 Fibonacci zone, which falls between $107,000 and $111,000. This confluence zone is reinforced by two Fair Value Gaps (FVGs) left behind during the explosive breakout—first around $119K and another near $111K, making both psychological and technical magnets for price action.

Compounding the bearish tilt, a CME futures gap between $114K–$116K also suggests that price may revisit this zone before resuming its uptrend. These gaps are rarely left unfilled in BTC’s history, and the triple convergence of retracement targets, unfilled liquidity pockets, and wedge support breakdown risk makes the $111K–$114K region a tactical battlefield for both bulls and bears.

Descending Wedge on 4H Chart Indicates Bullish Continuation Setup

On the 4-hour chart, BTC has transitioned from a textbook head-and-shoulders threat into a descending wedge pattern, a formation that typically precedes bullish breakouts. The wedge is supported by an ascending trendline that has been tested multiple times since late June and currently rests at $116,000. Price remains confined within this tightening range, coiling for what traders anticipate will be a breakout resolution within days.

A clean break above the upper boundary of the wedge—currently near $120,000—would confirm a bullish continuation structure and open the door for a fresh run toward the $123K ATH, with upside extension targets at $128K and $135K. However, if BTC slices below the lower boundary and loses the $116K level, the decline could quickly escalate toward the $111K demand zone, which served as the original breakout trigger above prior ATH levels.

Exchange Reserves Spike to Multi-Month High, Signaling Distribution

On-chain flows paint a cautious short-term picture. According to CryptoQuant, BTC reserves on centralized exchanges have surged to their highest level since June 25, suggesting that long-term holders and institutional entities may be cycling profits after the recent parabolic push. Historically, rising reserves have foreshadowed local tops, particularly when paired with waning momentum.

That said, this uptick in reserves doesn’t necessarily imply an immediate reversal. Previous bull cycles show that Bitcoin can consolidate or even advance amid mild distribution, especially when demand from spot ETF inflows counterbalances the supply. Still, the presence of more BTC on exchanges raises the probability of short-term volatility spikes and profit-driven selloffs, particularly if the $116K wedge support fails to hold.

ETF Inflows Could Add $1.8K for Every 10,000 BTC Purchased

Fresh inflow data indicates a growing correlation between ETF demand and price appreciation. For every 10,000 BTC added to ETF holdings, analysts calculate an average +1.8% price lift. That implies an approximate $2,100 increase at current levels. With net ETF inflows remaining robust—recent daily averages north of $1.2 billion USD equivalent—Bitcoin remains underpinned by institutional demand.

This structural support reinforces the longer-term bullish case. Some models now forecast that if ETF inflows persist at current levels, BTC could reach $150,000 by October. Such a target aligns with options data, which shows significant open interest accumulation around the $140K–$160K strike range for Q4 expiry. Traders view this as a potential magnet if the current consolidation resolves higher.

Retail Sentiment Remains Bullish but Greed Indicator Approaches Caution Zone

Market sentiment indicators remain skewed bullish. The Fear & Greed Index continues to hover in “Greed” territory but has yet to trigger the extreme warning threshold. Volume remains elevated, with daily turnover averaging over $100 billion, suggesting that liquidity remains healthy. However, several altcoins—particularly Ethereum (ETH-USD) and HBAR—are beginning to steal short-term attention, signaling a potential capital rotation phase if Bitcoin continues to stall under resistance.

UK to Liquidate $6.7B in Seized BTC, Raising Macro Supply Risk

The UK Treasury is reportedly preparing to liquidate more than £5 billion ($6.7B) in seized Bitcoin assets to cover fiscal shortfalls, a move that could exert short-term selling pressure on the market if executed swiftly. These assets—confiscated in 2018 and tied to Ponzi operations—were originally valued at under £300 million, but have surged more than 1,500% in mark-to-market gains. Any large-scale liquidation could become a headline catalyst, especially if announced near key support levels.

However, some analysts warn that repeating mistakes like Gordon Brown’s infamous gold sale in the early 2000s—now regarded as a massive lost opportunity—could backfire politically. Calls are emerging within the UK to instead hold a sovereign BTC reserve rather than offload into the open market at a moment of accelerating global adoption.

Altcoin Surge, Particularly in ETH and HBAR, May Delay BTC’s Move

While BTC-USD grinds sideways, altcoins are gaining relative strength. Ethereum (ETH-USD) has surged above $3,750, its highest since December 2024, and is on track for a potential breakout toward $4,000. Meanwhile, HBAR has rallied for four straight weeks and sits within striking distance of the $0.30–$0.34 resistance cluster, with upside projections as high as 50x from current levels if momentum continues.

This shift is creating a drag effect on Bitcoin dominance, suggesting that capital is temporarily rotating out of BTC and into high-beta altcoins. Historically, such phases tend to precede the next major leg higher for BTC, as altcoins begin to overheat and profits cycle back into Bitcoin during broader market expansions.

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