Bitcoin BTC/USD is "hanging by a thread" after slipping below the $112,000 support level, according to pseudonymous analyst Ali, who highlighted both technical and on-chain signals suggesting the market could face further downside pressure.

What Happened: Ali noted on Onday that while Bitcoin briefly bounced from $112,000, the recovery failed to hold. Price action from July and yesterday's session wick point to $110,500 as a potential interim support level.

On-chain data, however, paints a more concerning picture.

With $112,000 breached, Ali said a support gap exists down to $108,000, leaving limited demand to absorb selling pressure in the zone between.

Market dynamics have added to the caution.

Bitcoin ETFs collectively offloaded about 8,850 BTC last week.

Also Read: GOAT Network Establishes Pilot Fund With 34 BTC Treasury Purchase

At the same time, open interest in futures has risen despite the correction, suggesting traders are increasing leveraged long positions in an attempt to buy the dip.

Historically, such positioning has amplified declines when liquidations occur.

If $110,500 gives way, $108,000 becomes the next major level to monitor.

On the upside, Ali argued that Bitcoin must reclaim $112,000 and secure a 4-hour close above $112,600 to reverse the bearish momentum. Such a move could open the door toward $115,000.

Why It Matters: Meanwhile in a note sent to Benzinga, Gracy Chen, CEO of Bitget, offered a more balanced view, saying Bitcoin is expected to consolidate in the $110,000–$120,000 range over the next one to two weeks.

"Ethereum ETH/USD looks stronger, with targets between $4,600 and $5,200," Chen said.

She pointed to Ethereum's rally past $4,300, boosted by dovish comments from Federal Reserve Chair Jerome Powell, as a signal of robust ecosystem demand and potential onset of an altcoin season.

On-chain flows support her view, with data showing whales rotating capital from Bitcoin into Ethereum, accelerating ETH's momentum.

Chen added that ETF inflows and Ethereum's growing utility position ETH to outperform in the near term, even as Bitcoin remains supported by institutional demand.

Read Next:

Image: Shutterstock