Bitcoin experienced a sharp correction on August 14, falling below $117,000 and marking its most significant pullback in a month. The daily chart revealed a bearish engulfing pattern, a first since July 15, triggering concerns that seasonal weakness during the Asian "ghost month" could prolong the downturn. The "ghost month," which runs from August 23 to September 21, is a period associated with bad luck in Asian cultures, leading to historically negative returns for Bitcoin. Since 2017, Bitcoin has shown a tendency to sell off during this period, with an average peak decline of roughly 21.7%.
Despite the recent dip, on-chain data indicates resilient dip-buying activity. The Coinbase Premium Index climbed to a monthly high, signaling strong U.S. spot demand, while the Kimchi Premium Index turned positive, indicating renewed Korean buying pressure. Crypto trader Hansolar noted collective buy bids spread across Coinbase, Bitfinex, and the South Korean market. Further bolstering this bullish undertone, USDC inflows to exchanges surged to $3.88 billion since the price dip, suggesting traders are gearing up to deploy capital.
Moreover, capitulation signs have been muted. Only 16,800 BTC were moved to exchanges at a loss by short-term holders (STHs), significantly lower than the volumes seen in past sell-offs, where over 48,000 BTC were sold at a loss when Bitcoin dipped more than 5%.
Anonymous analyst Exitpump highlighted a potential support range between $116,000 and $117,000, where both spot and futures buying interest appears strong. However, the psychological impact of the "ghost month" may still weigh on market sentiment, influencing risk appetite and profit-taking behavior. Historically, Bitcoin has experienced sharp declines during this period, with notable drops including -39.8% in 2017 and -23% in 2021. If the current correction mirrors these historical patterns, Bitcoin could potentially fall into the $105,000–$100,000 range before finding a bottom.
Currently, Bitcoin's Short-Term Holder Spent Output Profit Ratio (STH SOPR) has jumped to 1.04, with the price hovering around $119K, indicating a bullish outlook. This suggests that short-term Bitcoin holders are, on average, absorbing the ongoing selling pressure. A bullish case also considers the maintenance of the 7-day SOPR above the range between 1.00-1.02.
Institutional buying has also been offsetting panic selling after $1 billion in liquidations. BlackRock's iShares Bitcoin Trust (IBIT) accumulated over $500 million in BTC in a single day, with its sister Ether ETF matching that buying volume. Combined ETF trade volumes in BTC and ETH spot products reached $11.5 billion, a liquidity footprint on par with daily trading in mega-cap equities like Apple. This divergence between panic-driven retail liquidations and methodical institutional accumulation suggests that deep-pocketed players are treating dips toward the $117K–$118K region as strategic entry zones.
Technically, Bitcoin has retreated from its $124,517 cycle high, forming a potential double-top pattern. Thursday's candle printed a bearish engulfing formation on elevated volume, a warning of heightened seller aggression. Price behavior around $117,200 has been technically significant and filling 75% of that gap before rebounding above the 4-hour 50 EMA suggests dip buyers are defending key liquidity pockets. Holding this level keeps the path open for $120K reclamation; losing it would likely accelerate sell programs targeting mid-$110Ks.
