Key Takeaways
- Bitcoin faces potential resistance at $122,000, where $2 billion in short liquidations are concentrated, though Q3 seasonal data signals downside.
- Falling RSI, declining spot BTC ETF inflows, and low trading volumes indicate waning bullish momentum.
- Wednesday’s FOMC minutes and anticipated White House crypto policy report could trigger a market rally.
Bitcoin (BTC) dipped briefly below $117,000 on Tuesday, clearing weekend accumulation near $117,000-$119,000—a classic sign preceding directional moves. Approximately $100 million in long positions were liquidated during this consolidation. Despite the dip, the 100-day EMA on the four-hour chart provides crucial dynamic support.
With minimal visible buying interest below $114,500, the prevailing path of least resistance points higher. The key contest will be between $120,000-$122,000, an area known for seller concentration and stop orders. A significant daily supply zone between $121,400 and $123,200 adds to this congestion, representing previous resistance.
Lengthening the view, BTC liquidation data confirms $2 billion in short positions could be triggered around $121,600.
Can Bitcoin Overcome $122,000?
While short-term charts suggest a bullish recovery, the longer-term setup posits fading momentum. Price action near the all-time high resembles a potential double top formation, reflecting buyer fatigue. Failure to decisively breach the $123,200 supply zone would validate bearish technical patterns and cap upside potential.
Underlying this caution, on-chain metrics deteriorate. The daily Relative Strength Index plummeted to 51.7 from 74.4, signaling exhaustion. Trading volumes slumped to $8.6 billion and spot BTC ETF inflows plummeted 80% to $496 million week-on-week, indicating cooling institutional enthusiasm, despite persistently high futures open interest at $45.6 billion.
Notably, 96.9% of BTC supply remains in the green, potentially inviting profit-taking once trendlines hold.
Seasonal headwinds loom large in August. Data shows returns average just 2.56%—and over 60% of the month typically fails to close positive. Diminishing on-chain activity, like declining active addresses and transfer volumes, reinforces expectations of a near-term correction.
Potential Catalysts
The following three days present high-impact events:
- USDT Cryptocurrencies, Federal Reserve: Any dovish wording from Fed Chair Jerome Powell relative to future rate cuts could inject volatility.
- BTC Price Markets, Binance, Price Analysis, Market Analysis, Liquidity: Wednesday’s release of FOMC minutes will be intensely scrutinized.
- Price Analysis, Cryptocurrencies, Bitcoin Price, Markets, Binance, Price Analysis, Market Analysis, Liquidity, White House: Thursday’s White House crypto policy report, potentially unveiling a Bitcoin Reserve Framework and delta-neutral accumulation mechanisms.
Possibly bullish outcomes include significantly higher spot ETF flows following the White House report or substantial price action following an unexpectedly dovish FOMC tone.
The possibility of Bitcoin surpassing $123,000 and even approaching new all-time highs remains contingent on market sentiment and global economic indicators.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.