Bitcoin falls below key moving averages, is the bull run in crisis? Range-bound between $112,000 with long and short positions, can the historical rise in Q4 turn the tide?

After falling more than 2% in a single day and briefly dropping to a low of $111,800, the price of Bitcoin has rebounded above $112,000 but has broken through several key technical indicators. Data from CryptoQuant indicates that bearish sentiment dominates the market, with some analysts believing that the bull run may have exhausted its momentum. However, there are also views that the Fed's rate-cutting cycle and the historic fourth-quarter rise may be enough to reverse the current technical weakness and usher in the next pump.

1. Price Fall and Bearish Technical Indicators

Bitcoin price fell by more than 2% in a day, testing a low of $111,800, before rebounding to above $112,000 at the time of writing, but has fallen below key technical indicators. Currently, Bitcoin is losing support from the 100-day and 200-day Exponential Moving Averages (EMA), which are positioned at $114,635 and $114,180, respectively. Falling below these technical levels has raised questions among analysts, who are beginning to discuss whether the bull run has come to an end, as multiple indicators now point to bearish territory.

2. On-chain data reveals bull run fatigue

Data from CryptoQuant shows that the Taker Buy/Sell Ratio of Bitcoin has dropped to -0.86, which is a key market sentiment indicator indicating that the market is in a bearish state. This indicator serves as a barometer of market control—values below 1 indicate that selling pressure dominates, while readings above 1 indicate that buyer strength prevails. The current reading of -0.86 indicates that sell orders significantly outnumber buy orders, painting a picture of pessimistic market sentiment. Historical data shows that this level was last seen at the market peak of $109,000 on January 20, followed by a three-month decline during which Bitcoin's price fell by 32%, dropping to $74,000 in April.

Joao Wedson, the founder and CEO of Alphractal, revealed that the latest fall of Bitcoin shows signs of a cycle exhaustion, which many market participants have not noticed. According to the SOPR trend signal, which he is skilled at showing the declining profitability of blockchain, investors have never accumulated BTC so late in Bitcoin's history at such a high Short-Term Holder (STH) Realized price ($111,400). Similarly, Bitcoin's Sharpe ratio is also weaker than in 2024, which means a lower risk-to-reward ratio, reducing the profit potential, which may not attract a large amount of institutions as most people think.

3. Market Sentiment and Capital Flow

Wedson stated that social interest has sharply declined, and many market makers are partially selling their BTC after a long period of accumulation and investing their stablecoin reserves more into altcoins. He added, "Therefore, even if BTC reaches a new all-time high, there is nothing wrong with that, but profitability will remain low, and the real focus will be on altcoins."

Crypto trader Honey_xbt believes that BTC is currently in a consolidation zone, and the next direction depends on the closing price of Bitcoin. According to her analysis, a daily closing price above $117,500 would be highly bullish and could push Bitcoin to new highs above $124,000. However, if the closing price is below $111,800, it would be bearish and could see BTC targeting new lows near $106,000, which is close to the 1-day EMA200.

4. The historic fourth quarter rise may turn the tide

Despite the current bearish signals, some positive factors may push Bitcoin prices higher next month. The Fed's recent shift towards monetary easing indicates that market participants expect the rate-cutting cycle to continue, with two additional cuts anticipated before the end of 2026. Historical trends also support an optimistic outlook for the final quarter of this year. Since 2013, Bitcoin has performed particularly well in the fourth quarter, with an average return of around 85% during this period.

5. Technical Analysis: The bearish wedge pattern may bring a correction

(Source: CryptoQuant)

On the technical side, Bitcoin's 4-hour chart shows a clear bearish wedge pattern breakout from the recent rising channel. After failing to maintain momentum near $117,836, the price dropped from the ascending wedge, confirming weakness and tilting the short-term outlook bearish. This pullback has pushed BTC towards the first target area around $112,967, with momentum indicating further downside pressure. If the selling continues, the next key support level is around $110,662, which could then lead to a deeper retracement towards $108,073, aligning with the final projected target of the wedge. Overall, the technical setup suggests that Bitcoin may continue to decline in the short term unless buyers reclaim the $115,000 level to invalidate the bearish outlook; otherwise, any rebound may face resistance.

Conclusion

The current market performance of Bitcoin paints a complex and contradictory picture. Despite on-chain data and technical indicators sending clear bearish signals, suggesting that the market may have entered a "bull run fatigue" phase, and that leveraged traders and some large holders are turning to altcoins, the long-term macroeconomic outlook and historic seasonal trends continue to provide strong support for a bullish narrative. This indicates that the current decline may not be the end of the bull run, but rather a healthy correction driven by technical liquidations and changes in market sentiment. The key moving forward will be whether short-term downward pressure will be strongly offset by macro-positive factors in October (such as expectations of continued interest rate cuts) and historic quarterly rebounds. Bitcoin's price is at a critical crossroads, and whether it can hold key support levels and eventually rebound to higher levels will depend on which of these two conflicting forces ultimately prevails.