Bitcoin Hits $112K With Traders Watching Bollinger Bands for Big Expansion

• Bitcoin dropped 2.88 percent to $112934 and showed signs of a Bollinger Band contraction setup again
• The chart shows a similar fakeout pattern that led to major expansion during the 2021 cycle top move
• Analysts expect BTC to reenter the Bollinger Bands soon, which may lead to a sharp push above $120000

Bitcoin (BTC) closed at $112,934 on August 2, 2025, down 2.88% for the day, triggering speculation over a classic Bollinger Band setup. A pattern identical to the 2021 cycle is now appearing, where a contraction phase led to a fakeout followed by significant price expansion. Technical analysts are watching closely for a similar move as the current cycle unfolds.

The BTC/USD daily chart, shared by SuperBitcoinBro on X, compares two Bollinger Band setups: one from 2021 and the other from this week. Both cases exhibit a contraction phase—where volatility narrows—followed by a brief breakout and an apparent fakeout. The post, viewed over 23,000 times within 12 hours, points to an early stage of what could become a sharp expansion move.

As the market decides its direction, traders are asking a crucial question—will this contraction repeat the 2021 breakout behavior, or diverge completely?

Bollinger Band Dynamics Hint at Repeat Cycle

In 2021, BTC saw a Bollinger Band contraction in early November, followed by a fakeout move and rapid expansion downward. The current setup mirrors that earlier pattern, creating expectations of similar volatility. On the left side of the image, a yellow zone labeled “Fakeout” precedes a steep drop from around $67,000 to below $44,000.

The new chart on the right replicates this pattern with updated prices. BTC formed a tight Bollinger Band squeeze in late July 2025, followed by a quick drop outside the lower band. This sudden breakdown, marked “Fakeout?”, is now under scrutiny as a possible precursor to expansion in either direction.

The Bollinger Band indicator is a popular tool for identifying volatility shifts in price action. Contraction often signals buildup, and expansion reflects strong directional momentum. Historical precedents like the 2021 setup give traders a reference point for current market behavior.

While similarities exist, the tweet cautions that patterns may not be identical. Technical conditions, volume behavior, and macro context also influence outcomes, even if charts align.

Analyst Suggests Timeline for Bollinger Reentry

SuperBitcoinBro stated that if this pattern plays out, BTC should close back within the Bollinger Bands by Sunday or Monday. That would mark a return to normal volatility and signal the fakeout as complete. The chart suggests a potential for sharp upward expansion after such reentry.

The previous pattern showed that after reentering the Bollinger Bands, BTC had a violent breakout in days. If the same scenario occurs, price may rapidly push above $120,000 and retest upper levels. Traders would likely respond with renewed spot buys or leveraged long positions.

This potential expansion has drawn comparisons to the final leg of the 2021 bull cycle. Although the timeline and macro factors differ, the market structure remains similar. Traders continue to watch for confirmations in daily candle closings.

Such a move could revive confidence among bulls who’ve seen BTC stall below recent highs. But failure to reenter the Bollinger Bands could invite further selling pressure, pushing BTC toward $108,000.

Will Bitcoin Confirm the Fakeout and Trigger a Major Move?

The central question remains—will BTC follow through with a clean expansion or invalidate the setup?

If the fakeout is confirmed and BTC moves back inside the bands, history suggests a high chance of upside momentum. A rejection, however, could signal that conditions this cycle are less predictable than in 2021.

Traders now await this weekend’s close to determine whether Bitcoin’s current contraction was a precursor to expansion or a breakdown in disguise.