Did You Buy the Dip? 5 Signals Bitcoin’s Bull Run Might Be Back

After briefly dipping to US$112,000, Bitcoin has bounced back, and market indicators suggest we could be in the early stages of a renewed rally.

The world’s largest digital asset has had a choppy start to August, but some believe the recent shakeout might have cleared the path for a stronger move ahead. Let’s look at five key reasons analysts are eyeing US$126,000 as the next major target.

1. Bitcoin’s “Power of 3” Formation is Playing Out

Bitcoin’s recent price movement seems to be following a classic “Power of 3” market structure (often used by institutional traders). This structure includes:

• Accumulation: BTC held steady between US$119,500–US$115,300, forming a base.
• Manipulation: The sharp drop to ~US$112,000 appears to have flushed out over-leveraged long positions.
• Distribution: If BTC can now reclaim US$115,300 and hold above it, technicals suggest a move towards US$126,000 could be on the cards.

This formation has historically been a sign of large players accumulating before a major move.

2. Big Liquidation Event = Market Reset

Last Friday saw nearly US$1 billion in crypto positions wiped out, with over US$240 million in Bitcoin liquidations alone. As a result, open interest dropped from US$88 billion to US$79 billion.

This kind of mass liquidation can be healthy for the market; it washes out excess leverage and clears the slate for more sustainable growth.

3. Critical Support Holding Firm

Despite the sell-off, BTC found support at a key level: the US$112K zone. This area coincides with the previous all-time high set in May and now appears to be acting as a solid support base.

Bitcoin also filled a “fair value gap” between US$115,200 and US$112,000, a bullish sign that suggests price imbalances have been resolved, and selling pressure may be exhausted.

4. Funding Rates Turn Negative

Funding rates across major exchanges like Binance and Deribit have turned negative, meaning short positions are paying long positions to stay open. This typically occurs when the market is heavily skewed bearish.

For seasoned traders, this is often a contrarian indicator, meaning that when sentiment is too one-sided, a snapback can follow. Coupled with recent liquidations, it suggests BTC might be gearing up for a rebound.

5. US$120K Is the Next Magnet

If momentum builds, Bitcoin’s next major “liquidity magnet” sits at US$120,000. Analyst Michaël van de Poppe notes that US$114,800 and US$116,800 are critical resistance levels; if those are flipped into support, BTC could rally fast.

While he warns a brief retest of US$110,000 isn’t off the table, sentiment is shifting. A clean break above US$116,800 would strengthen the bull case considerably.

The past week has been a test for Bitcoin holders, but signs are emerging that the worst of the correction may be over. A key support zone is holding, leveraged positions have been reset, and bearish sentiment is peaking.

Whether you’re buying dips or watching from the sidelines, staying informed is crucial. At Ainslie, we’re here to help you navigate both the crypto and bullion markets with confidence, no matter the cycle.