Bitcoin (BTC) price has been trapped in a mid-term correction mode since hitting its all-time high of around $124.4k last week. The price has been testing the critical $112k support zone, a level that analysts see as a crucial line in the sand for the current bull market. On the daily chart, a potential double-top formation combined with a bearish RSI divergence suggests that sellers have had the upper hand, with the $120k resistance proving to be a formidable barrier. But the question on every trader’s mind is simple: why is Bitcoin struggling? Source: TradingView From a different perspective, the BTC/USD pair could be forming a horizontal consolidation, which ranges between $112,108 and $123,500. The horizontal consolidation will be invalidated if BTC price consistently closes either below or above the upper border in the coming days. Why Is Bitcoin Price Struggling to Maintain Bullish Sentiment Rising Capital Rotation to Altcoins The primary headwind for Bitcoin appears to be a significant rotation of capital into the altcoin market. This isn’t just speculation; the data is painting a clear picture. On-chain analytics show that major players are moving funds out of Bitcoin and into assets like Ethereum. For instance, market data from SoSoValue reported that BlackRock’s spot Bitcoin ETF (IBIT) saw a $127.5 million outflow on Wednesday, while its Ethereum ETF (ETHA) raked in a $233.6 million inflow on the same day. This trend is echoed in whale activity as well. Lookonchain tracked a seven-year-old whale wallet selling a portion of its massive Bitcoin holdings to purchase over 62,000 ETH, immediately using it to open a $577 million long position on Ethereum. It appears the hunt for higher returns is leading investors to believe a September Altcoin Season is Confirmed, with Two Massive Catalysts on the Horizon. A Bitcoin OG who received 100,784 $BTC($642M) 7 years ago ended his dormancy recently— selling $BTC while buying 62,914 $ETH ($267M) spot and opening a massive 135,265 $ETH($577M) long position.We just spotted another Bitcoin OG depositing $BTC into #Hyperliquid to sell and buy… pic.twitter.com/qhebN276Lf — Lookonchain (@lookonchain) August 22, 2025 Inflation Fears Add to the Pressure Compounding the problem are persistent macroeconomic fears in the United States. Hotter-than-expected unemployment claims this week have dampened hopes for an imminent Fed rate cut. According to the Kalshi prediction market, the odds of a 25 bps rate cut in September have now slipped to around 59%. Traders are now waiting for Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium for any signal on the Fed’s next move. This uncertainty is keeping risk-averse capital on the sidelines and adding to the pressure on Bitcoin’s price. What Analysts Are Watching Next According to crypto analyst Michaël van de Poppe, BTC price has approached a crucial support level around $112k, which could yield a fresh bull rally towards a new ATH. #Bitcoin did take the last low, but it didn't take all lows yet. Tricky times.I wouldn't be surprised with volatile moves on both sides to wipe out all liquidity before the real move comes in. Typical FED event behavior. This area is there to accumulate. pic.twitter.com/cm2W4yj7tE — Michaël van de Poppe (@CryptoMichNL) August 22, 2025 However, he cautions that Bitcoin must reclaim $116.8k soon to invalidate the bearish scenario. A failure to do so could open the door to a deeper correction toward the $108k level in the coming weeks. For a closer look at the immediate price action, you can check the latest Bitcoin (BTC) Price Prediction for August 23. Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.