Bitcoin holds near $119K as leverage decline limits chances of sharp pullback

Bitcoin is holding just below the $119,000 mark, with a calmer leverage backdrop helping to steady the market after recent swings.

According to an Aug.15 analysis from CryptoQuant contributor Arab Chain, the estimated leverage ratio across major platforms has eased from its early August highs above 0.27, dipping to around 0.25 before seeing a mild uptick. 

This contrasts with May and late July, when price and leverage increased simultaneously, indicating that traders were placing larger, riskier bets. 

Bitcoin leverage drop supports market stability

The recent drop in leverage indicates that traders have been lowering their aggressive positions, even though prices are still high. This unwinding has helped to prevent the rapid, cascading sell-offs that often follow highly leveraged rallies.

As per Arab Chain’s insights, Bitcoin’s (BTC) current price action seems to be driven by actual liquidity rather than excessive speculation, as the ELR remains stable in the 0.24–0.25 range. The market may have a better basis for future gains if leverage and spot demand are kept in balance.

Bitcoin technical analysis

On the 4-hour chart, BTC is hovering just below the midline of its Bollinger Bands, with the upper band, which is near $119,900, acting as a strong resistance. While the relative strength index, at 55, does not suggest either overheated buying or deep selling pressure, the stochastic %K, at 68.7, indicates steady but not extreme momentum.

The short- to long-term moving averages, which span from the 10-day EMA at $118,676 to the 200-day SMA close at $100,152, exhibit bullish alignment. A positive Bull Bear Power reading supports the flash buy signals displayed by the momentum and MACD indicators.

If leverage remains in check, clearing $119,900 could lead to a run toward $123,000. The price may decline toward $117,700 (20-day EMA) or $114,900 (50-day EMA) if there is a rejection at $120,000 and ELR spikes above 0.27.