Bitcoin continues to surge as it beautifully carves a path toward new ATH. At this moment, the $112,000 mark is shaping up to be a key level of support. Anjali Mehra, a DeFi contributing opinion writer, unpacks the technicals keeping this price level so sticky. For example, she compares the activity of retail traders to that of institutional investors and studies how major geopolitical events can affect Bitcoin’s value. We’re thrilled to be able to provide you the exclusive first look at the complete story on GreedyChain.com.

Technical Support at $112K

The $112k price point is not some arbitrary figure either. It’s a level rich in BTC’s recent past lore. First off, this zone is indicative of a former all-time high, a level at which buyers aggressively defended prices before. This memory can serve as a self-fulfilling prophecy, with traders expecting new buying enthusiasm near the similar horizontal line.

Further solidifying this support is the price realized distribution of on-chain UTXOs (unspent transaction outputs). During the periods, the data points to a significant number of coins that last exchanged at prices between $108,000 and $112,000. Hundreds of billions of dollars were poured into Bitcoin by investors who purchased at such levels. As a result, they’re highly disincentivized from selling under their cost basis, forming an organic demand wall.

Technical analysis pinpoints $112,000 as one of the most critical lines in the sand. In the bullish case, Bitcoin might find support above this mark and resume its bullish movement. If it moves below $112,000, it could trigger a cascade of stop-loss sell orders that could drive the price radically lower toward the next major support zone. This level is, thus, a big thing to look out for as an indicator of strength or weakness.

Retail vs. Whale: Understanding Market Dynamics

The Bitcoin market is not a monolith. It’s a global, complex, dynamic ecosystem filled with diverse participants—each with different motivations, capabilities, and levels of sophistication. In short, to understand what’s happening in today’s market, you need to understand the opposite ways that retail traders vs. institutional investors (whales) behave.

  • Trading Volume: Retail investors typically trade in smaller volumes and with less frequency compared to institutional investors who often execute trades involving 10,000+ shares.
  • Market Impact: The collective impact of retail investors on Bitcoin's price is minimal, whereas institutional investors wield significant market influence. For example, institutional investors account for 80% of S&P 500 ownership.
  • Investment Size: Retail investors generally make smaller investments, while institutional investors engage in large-scale investments.
  • Trading Costs: Retail investors typically face higher fees and commissions compared to institutional investors, who benefit from lower fees due to bulk trading.
  • Time Horizon: Retail investors tend to adopt a flexible, long-term investment approach, whereas institutional investors often face quarterly or yearly performance pressures.

Currently, the market appears to be in a healthy consolidation phase, partly due to the observed lack of significant institutional selling. Retail sentiment is a fickle thing. The absence of major sell-offs by institutions shows that they are confident about Bitcoin’s long-term prospects. Just remember that institutional selling can kill the market in a flash. This dangerous, speculative activity serves to create more volatility overall and actually increases the fragility of the market.

Geopolitical Wildcards: The Unpredictable Influence

Geopolitical events have added a rosy new element of uncertainty into all markets, and Bitcoin is no exception. Anjali Mehra explains why increased geopolitical risks often lead to a “flight to quality.” In this hypothetical, when investors turn toward safe-haven assets such as Bitcoin, demand would increase and prices would soar.

Over the past decade, Bitcoin has established itself as a potential hedging tool against geopolitical risks, with demand increasing during global instability. Our previous research has found that Bitcoin’s price volatility increases significantly in response to geopolitical risks. It’s any wonder, then, that the cryptocurrency tends to respond explosively to such news.

While current geopolitical risks can have a positive effect on Bitcoin prices, these effects are sometimes weaker than the effects of past geopolitical risks. Taken together, this indicates that the market could already be pricing in a significant amount of geopolitical uncertainty. Any rapid increase in tensions could easily set off a major price move.