Bitcoin Stands at a Decisive Threshold: Will $118,000 Pave the Way for a Rise Back?

Bitcoin has faced many challenges in gaining strong momentum since reaching the old historical peak of around $123,800 in mid-July. Although this leading cryptocurrency has established a new peak around $124,120, the market seems to lack the momentum to continue a sustainable bullish cycle. Strong Selling Pressure and Recovery from Fed's Policy Signals In the past week, Bitcoin faced significant selling pressure, even dropping below the $112,000 mark on August 21. However, the market reacted positively after the speech by the Chairman of the Federal Reserve (Fed) – Jerome Powell – on August 22, helping the price of BTC recover. Threshold $118,000 – The Key to the New Bullish Trend According to on-chain expert Ali Martinez's analysis published on platform X ( formerly known as Twitter) on August 23, the price level of $118,000 is currently considered the most crucial factor determining the next direction of Bitcoin. Martinez emphasizes that BTC needs to quickly regain this price level to return to a growth trajectory. The technical indicator you mentioned is Glassnode's MVRV Momentum – a tool used to identify macro trends in the market. MVRV Momentum is composed of the MVRV ratio and the simple moving average (SMA) for 70 days. When the MVRV ratio rises above the 70-day SMA, it usually indicates that the market has entered a strong growth phase, with most investors holding profits. Conversely, when the MVRV falls below the 70-day SMA, it suggests a bearish trend, as many investors are at a loss compared to their entry price. Currently, according to Martinez, the 70-day SMA is hovering around the $118,000 mark. A return of the MVRV above this level would be a strong signal indicating the return of the long-term bullish trend. Current Bitcoin Price Situation At the time of writing, the price of Bitcoin is hovering around $116,217, bullish more than 2% in the past 24 hours, but still down more than 1% compared to last week. This trend shows that BTC is in a state of "indecision" and may explode in one of two directions in the near future. Conclusion The $118,000 level is not only an important technical milestone but also holds significant psychological weight for the market. If Bitcoin can break through and maintain above this level, it is highly likely that we will witness a new wave of growth. Conversely, failure to reclaim this price area could lead to additional downward pressure and cause the market to enter a deeper correction phase.