BTC Faces Potential Weakness; Technical Indicators Point to Downside Risks

Key Technical Considerations Suggest Short-Term Pullback

• A hidden bearish divergence persists between Bitcoin’s price and its Relative Strength Index (RSI).
• A notable CME gap near $114,000-$115,000 could trigger a price retracement.
• The Index Bitcoin Cycle Indicator (IBCI) has entered a distribution phase.

This technical analysis, compiled on July 11th, 2025, indicates potential near-term caution for Bitcoin (BTC). While the long-term bullish trend remains intact, three critical chart signals suggest a possible push towards new weekly lows in the coming sessions.

Hidden Bearish Divergence Questioning Bullish Momentum

Bitcoin’s current price action reveals a hidden bearish divergence on the RSI. This pattern is characterized by higher highs in price coupled with lower highs in the momentum indicator, signifying weakening buying pressure.

Historical occurrences suggest that this divergence, which previously resulted in a significant price drop, could herald a corrective move. Such a pattern often precedes volatility and downward corrections.

BTC CME Gap: Potential Downside Magnet

A significant CME gap ($114,380-$115,635) is currently visible on the BTC daily chart. These gaps, forming during CME’s off-hours, represent untraded price ranges that frequently get ‘filled’ during regular market sessions.

Historical data underscores the tendency for Bitcoin to revisit these gaps, with a high fill rate noted this year. Seven out of nine CME gaps applied to BTC have been filled, suggesting a strong likelihood that this current void, if filled downward, could lead Bitcoin to retest the $114,000 support level.

BTC Enters Distribution Phase

Anonymous analyst “Gaah” reports that the Index Bitcoin Cycle Indicators (IBCI) support the notion that Bitcoin is entering a distribution zone. Historically, distribution zones precede periods of market euphoria and potential tops.

Currently, the IBCI has reached approximately 80% of the defined distribution range (considered complete at 100%). Gaah emphasizes that this is the third entry into this phase during the current bull market, serving “not necessarily at a major end-of-cycle top.” Key indicators, including the Puell Multiple and STH-SOPR, remain sub-average, hinting at ongoing, though perhaps tapering, aggressive profit-taking.

“The behavior of the IBCI therefore offers an important warning sign: we are in a zone of high corrective risk in the short term, but not necessarily at a major end-of-cycle top.”

quoted analyst ‘Gaah’.

Collectively, these signals point towards a complex short-term environment for Bitcoin, balancing the ongoing bull trend with potential near-term volatility. Traders are advised to monitor the key technical levels closely.

This article is not investment or trading advice. Every investment and trading move involves risk, and readers should conduct their own research before making decisions.