After a sharp rebound in early summer, the bitcoin price is once again facing downward pressure, raising concerns among traders about whether the correction has further to run. With BTC hovering around $114K, all eyes are now on the $110K level—a psychological and technical support line that could define the short-term trend.
Despite strong fundamentals and long-term adoption narratives, recent on-chain data and profit-taking patterns suggest that a deeper retracement isn’t off the table. But what does the data really show?
Bitcoin Price: Struggling to Regain Momentum
The daily chart shows Bitcoin consolidating in a tight range just above $114K after failing to hold its recent highs above $120K. The latest bounce appears weak compared to previous recoveries, and volume is beginning to thin out.
Source: Tradingview
Unless BTC can post a strong daily close above $116K with rising volume, short-term sentiment could continue to fade. Many analysts now see $110K as the must-hold level, with a clean break below potentially opening the door to a drop toward $103K.
MVRV Ratio Points to Possible Overvaluation
The MVRV ratio (Market Value to Realized Value) is hovering around 2.2, suggesting the market may still be slightly overheated compared to historical norms. This ratio tends to peak before major corrections and bottom out during accumulation phases. The recent dip shows some cooling, but it hasn’t yet hit levels typically associated with strong re-accumulation zones.
Source: CryptoQuant
When paired with weakening price momentum, the current MVRV suggests caution. While this doesn’t confirm a major drawdown, it indicates that further downside remains on the table unless new demand kicks in.
Exchange Reserves Continue Falling – A Bullish Divergence?
Interestingly, while price action softens, exchange reserves continue to drop, reaching their lowest point in over 12 months. This signals that investors are still withdrawing Bitcoin from centralized platforms, likely for long-term holding or cold storage.
Source: CryptoQuant
This divergence—lower exchange reserves amid a price pullback—has historically preceded bullish reversals. However, without a catalyst or strong buying volume, it may not be enough to hold the $110K line if market sentiment continues to weaken.
Final Thoughts: What This Means for the Bitcoin Price
While the bitcoin price is holding above $114K for now, multiple on-chain metrics hint at a fragile setup. The MVRV ratio shows the market is still cooling from recent highs, and the declining exchange reserves indicate long-term confidence—but that alone may not stop a short-term correction.
If the $110K level breaks, traders should brace for potential volatility and a retest of deeper support zones. On the flip side, holding this line could restore confidence and set the stage for a renewed push toward the $120K range. For now, caution and tight risk management appear to be the dominant strategy.
