Will Bitcoin Test $105,000 Again? On-Chain Metrics Signal Short-Term Risks

Main Points:

• After retesting the $112,000–$113,000 demand zone, BTC is poised to break its downtrend, potentially reaching $115,700.
• Multiple on-chain indicators converge around $105,000–$106,000, marking a hidden risk zone for coins held by short- and medium-term investors.
• UTXO Realized Price Distribution shows a major supply barrier at $117,000, with thin support below $113,000, exposing a large gap down to $108,000.
• Open interest remains elevated at $79 billion, while Fear & Greed swings from “Extreme Greed” to neutral, indicating persistent market fragility.
• A renewed retest of $105,000 could trigger sharp volatility and mass liquidation among leveraged traders, although the medium- to long-term bullish thesis remains intact.

1. Recent Price Action and Demand Zone Retest

Bitcoin (BTC) has spent much of the past week in tight consolidation after briefly revisiting the $112,000–$113,000 demand zone on August 6, 2025. At publication, BTC is attempting to break above a descending trendline drawn from early July highs. A successful breakout could propel prices toward last Monday’s peak at $115,700. Conversely, failure to clear this resistance may usher in renewed selling pressure, particularly if on-chain risk zones are tested.

1.1 Demand Zone Dynamics

Following the 5 % pullback from the all-time high of $123,000 in mid-July, BTC bounced off the strong demand cluster around $112 K. Historically, these zones—where large buy orders accumulate—have served as reliable support in volatile corrections. However, on-chain heatmaps now highlight increasing sell-side concentration just below this level.

2. Hidden Risk Zone at $105,000–$106,000

Prominent crypto analyst “Cryptomy” warns of a “hidden risk zone” centered on approximately $105,000, where several realized-price indicators for different holder cohorts converge.

• UTXO Cost-Basis Histogram shows a dense wall at $105,644, suggesting significant coin accumulation or break-even selling at this level.
• 1–3-Month Holder Realized Price averages around $106,000, reflecting mid-term holders’ cost basis.
• Short-Term Holder (STH) Realized Price for coins held under 155 days clusters near $105,350—underscoring where newer entrants stand.

Together, these metrics imply a confluence of potential sell orders just below current spot prices. A failure to hold this zone could spark accelerated declines as break-even sellers capitulate.

Insert Figure 1 here:
Figure 1: Simulated UTXO Cost Base Histogram illustrating concentration at $105,644, $106,000, and $105,350.

3. Glassnode UTXO Realized Price Distribution

Glassnode’s UTXO Realized Price Distribution (URPD) further highlights potential resistance and support bands:

• Resistance at $117,000: Over 634,051 BTC UTXOs were realized or moved around this level, creating a formidable supply barrier.
• Thinning Support below $113,000: Once BTC dips under $113 K, few cost bases exist until $108 K, indicating a large void that could precipitate a sharp slide.

In the absence of significant buy orders in this gap, any break below $113 K risks cascading price action down to the next meaningful cluster near $108 K.

4. Elevated Open Interest and Market Sentiment

Trading platform Hyblock Capital reports that Bitcoin’s derivatives open interest remains high at $79 billion, implying that speculative positions have yet to unwind substantially.

• Peak in July: On July 16, open interest reached overheated levels while the Fear & Greed Index hit “Extreme Greed,” preceding a swift correction from $120 K to $112 K.
• Current Neutral Sentiment: Although the index has since cooled to neutral territory, the persistence of high open interest suggests that leverage could amplify moves in either direction.

Insert Figure 2 here:
Figure 2: Simulated Fear & Greed Index vs. Open Interest over the past 14 days.

5. Structural Risks in the Futures Market

On July 29, researcher Axel Adler Jr. highlighted that the net futures position peaked at –7.5 % bearish immediately after Bitcoin’s all-time high. While it has eased to –5.2 %, the underlying structure remains skewed:

1. Potential Liquidation Cascades: A sudden negative catalyst—such as an unexpected regulatory announcement or large-scale sell order—could trigger a domino effect of long-position liquidations.
2. Margin Pressure: High leverage coupled with thin on-chain support may exacerbate price swings, as margin calls force stop-loss orders.

These conditions underscore the critical importance of monitoring funding rates and trader positioning before committing new capital.

6. Broader Market Trends and Macro Backdrop

Beyond on-chain metrics, macro factors and broader crypto developments shape near-term BTC outlook:

• Institutional Adoption: Major asset managers are diversifying into spot BTC ETFs, with net inflows of $2 billion in July alone (Bloomberg).
• Regulatory Signals: The U.S. SEC is reportedly reviewing applications from additional issuers, potentially expanding product availability in Q4 2025.
• Alternative Layer-1 Growth: Ethereum’s Paris upgrade improvements and Solana’s surge in TVL (Total Value Locked) have drawn liquidity away from Bitcoin, pressuring BTC dominance.
• Macro Tech Rotation: Equities have outperformed crypto in 2025, but impending Fed rate cuts may rekindle risk appetite across digital assets.

Investors should weigh these forces against on-chain risk clusters to calibrate entry and exit points.

Conclusion

In the short term, Bitcoin faces a critical juncture. On-chain signals converge around $105,000–$106,000, highlighting a hidden risk zone where both short- and mid-term holders could liquidate positions. Compounding this, Glassnode reveals weak support under key levels, and elevated open interest signals persistent leverage risk. A retest of $105,000 may trigger intense volatility and a cascade of liquidations, particularly if bearish futures positions remain. However, medium- to long-term fundamentals—such as ETF adoption, network upgrades, and macro easing—support a bullish outlook beyond this correction. As always, prudent risk management and attention to both on-chain metrics and broader market trends will be essential for navigating the weeks ahead.