Bitcoin’s August price action is sending mixed technical and on-chain signals, with one analyst warning that the 200-week simple moving average (SMA) is losing its strength as support, while another suggests that a sharp decline in 2025 purchases may indicate the market is approaching a bottom.
According to crypto analyst Rekt Capital, buying pressure near the 200-week SMA was strong in July and helped Bitcoin stage a limited recovery. However, no clear buying support has emerged in August, raising concerns that this widely watched long-term level may be breaking down as a floor. The analyst noted that this mirrors a scenario outlined about six weeks ago, when the 200-week SMA was expected to provide only a short-term bounce before potentially giving way over the medium term.
The 200-week SMA has historically marked significant Bitcoin cycle bottoms and acted as a strong accumulation zone during bear markets. If it fails, long-term holders could face deeper bearish pressure, while a strong bounce from that level has often marked favorable entry points.
Separately, on-chain analyst Murphy shared data showing that Bitcoin bought in 2025 has become largely underwater, with about 4.77 million BTC currently in loss after a 41.5% decline from the December 2024 peak, excluding wallet transfers. Murphy noted that during the 2018 bear market, BTC bought near the prior peak dropped 62%, and in 2022 it fell 51%. Based on this pattern, a market bottom could form when the decline reaches roughly 50% to 60%, meaning the current 41.5% pullback may be approaching that zone.
Murphy also pointed out that the pace of selling has slowed since February, with remaining holdings showing limited movement. This may indicate that sell pressure is easing. Additionally, Bitcoin held by ETFs and Strategy (formerly MicroStrategy) is considered less likely to be sold in the current environment, potentially limiting further downside.
Together, the analyses highlight a fragile market: technical support is weakening in the short term, but on-chain data suggests that a significant portion of the downside may already be priced in. Investors are likely to watch whether buying interest returns at the 200-week SMA or whether the level gives way, as that could set Bitcoin’s tone for the coming weeks.
