Key Highlights
- First time in a month, Bitcoin falls below $110,000 with around 3% drop
- Small Investors are buying the dip
- Strategy adds over $350 million worth of Bitcoin to its massive holdings
On August 25, the biggest cryptocurrency, Bitcoin (BTC), slipped below $110,000 after plunging by approximately 3% in a single day, continuing its downward spiral.
At the time of writing, Bitcoin is trading at around $109,530.93, falling below $110,000 for the first time in a month, according to CoinMarketCap.
All Eyes on the $105,000 Support Level
All attention is now focused on the $105,000 price level as a critical support zone for Bitcoin following its retreat from the all-time high of $124,000.
Analysis of different investor groups reveals a mixed but telling picture. The smallest investors were heavy sellers at the peak but quickly started buying again as prices fell, showing they tend to follow market trends rather than lead them.
In contrast, the mid-tier investors began accumulating coins at the high and have continued their steady buying without pause.
The behavior of larger wallets is more cautious. A key cohort of mid-sized whales shifted from buying to selling as the price fell through $118,000. The most crucial group to watch now is holders of 100 to 1,000 BTC, who are both buying and selling right around the $105,000 mark.
This balanced activity establishes that price is a major structural support level. The very largest whales are still net sellers, though their selling pressure has noticeably decreased as the correction has progressed.
Overall, selling still outweighs buying, but its intensity is fading. The $105,000 level is seen as a final stronghold; a break below it could spark fear and accelerated selling, while holding firm could mean the asset is ready for a stronger recovery.
Simultaneously, the recent plunge performed a necessary cleanup in the derivatives market. The price drop triggered a massive long squeeze, forcing out traders who had used excessive leverage to bet on higher prices. This cascade of forced selling wiped out overextended positions and rattled sentiment.
However, this painful event effectively reset the market by flushing out weak hands and draining speculative froth.
With leverage now reduced and open interest reset, the market is considered to be on a healthier, more stable foundation, potentially setting the stage for a more sustainable upside move.
Michael Saylor’s Strategy Buys 3081 Bitcoins
Michael Saylor’s company, MicroStrategy (now called Strategy), has added over $350 million worth of Bitcoin to its massive holdings. The firm made three separate purchases this month, though they were relatively modest compared to its previous buying activity.
This slower pace in August is likely a response to the high volatility currently shaking the Bitcoin market, which has also caused the company’s own stock price to see a significant decline over the last two months.
According to its latest disclosure, the company bought 3,081 BTC for a total of $356.9 million, paying an average of about $115,829 per coin. This brings its total treasure chest to an astounding 632,457 BTC, which are now worth over $70 billion.
The company is sitting on an unrealized profit of nearly $23.8 billion from its Bitcoin investments. However, its most recent purchases have actually lost money due to the market dip, with its last five buys since mid-July now showing a combined paper loss of over $190 million.
The strategy of holding Bitcoin on a corporate balance sheet, which MicroStrategy pioneered, has accelerated into a global trend. Other companies, like Japan’s Metaplanet, have begun aggressively copying this model. But the institutional interest is no longer limited to just Bitcoin.
Ethereum has seen a gigantic surge in attention from major firms, with over a dozen companies now stacking billions of dollars worth of ETH. This hype was reinforced by the successful launch of U.S.-listed spot Ethereum ETFs, which even outperformed their Bitcoin counterparts in August.
Most recently, reports suggest that three major financial players are even discussing creating a Solana treasury, highlighting the unprecedented and broadening level of institutional faith in crypto assets this year.