​​​Bitcoin Rises as Institutional Demand and Supply Constraints Fuel Momentum

Bitcoin extended its gains yesterday, climbing nearly 3% to trade around $112,187.00, as renewed optimism among traders and institutional investors pushed the world’s largest cryptocurrency into a key resistance area.

​Market analysts noted that the digital asset is consolidating near this technical threshold, raising the possibility of a breakout that could carry prices higher. At the same time, they cautioned that a pullback toward the $100,000 level remains a risk if momentum fades.

​The rally comes against a backdrop of rising global liquidity and increasing acceptance of Bitcoin within traditional financial markets. Expansive monetary conditions, along with a growing appetite for risk assets, have provided a favourable environment for cryptocurrencies.

​The launch of spot Bitcoin exchange-traded funds (ETFs) in the United States (US) earlier this year has also transformed the landscape. These products, which offer regulated and accessible exposure to Bitcoin, have quickly attracted more than $100 billion in assets, drawing in a broad base of institutional participants from university endowments to corporate treasury departments. For many, Bitcoin is now being positioned as a form of digital gold.

​Adding further support to the recent rise is April’s Bitcoin halving, which cut the rate at which new coins are issued. With supply growth reduced, the cryptocurrency’s scarcity has increased at a time when demand is being reinforced by mainstream financial adoption. This dynamic is widely seen as a structural tailwind for the asset.

​Taken together, the combination of supply constraints, inflows from institutional investors, and supportive macroeconomic conditions has strengthened Bitcoin’s appeal. Whether the current consolidation near resistance results in a breakout or a retracement will depend on market sentiment and broader economic indicators in the days ahead. Investors are watching closely to see if this momentum can carry the cryptocurrency to new highs.

​Bitcoin technical analysis
Bitcoin bullish scenario:

Bitcoin digs into the $111,965.80 – $111,982.45 resistance zone, made up of the May high and early August low.

If overcome, the 28 August and 5 September highs at $113,421.03 – $113,510.23 may be reached next.

For the medium-term bullish trend to resume a rise above the late August high at $113,510.23 would need to ensue.

Bitcoin bearish scenario:

Rejection by the $111,965.80 – $111,982.45 resistance zone could lead to a retest of the $110,000 region and also the 4 September low at $109,385.95. Further minor support sits at the 26 August low at $108,757.90.

Were it to give way, the recent lows at $107,412.82 – $107,286.25 may be retested as well. Failure there would probably eye the early July low at $105,105.03.

Bitcoin daily candlestick trading chart