Bitcoin price action shows a strong attempt to breach the $122,000 resistance level. This potential breakout is underpinned by technical factors including significant liquidity clusters and the liquidation of short positions, with the 100-day Exponential Moving Average (EMA) offering critical dynamic support.
Spot Bitcoin Exchange-Traded Fund (ETF) inflows have experienced a sharp decline, dropping 80% week-over-week to $496 million. Concurrently, the Relative Strength Index (RSI) has fallen from 74.4 to 51.7, signaling waning buyer enthusiasm and fading bullish momentum.
Historical price patterns suggest potential headwinds in the near term. Bitcoin has recorded negative monthly closings for August in over 60% of its history, with an average return for the month of just 2.56%, highlighting historical seasonal risks.
Upcoming external events pose significant influence over market sentiment. Key factors include the release of the Federal Open Market Committee (FOMC) meeting minutes and a forthcoming White House report on cryptocurrency policy. Any dovish signals from the Fed could provide a boost to Bitcoin’s price trajectory.
Supporting the cautious outlook, on-chain data reveals declining transfer volumes. Furthermore, a substantial 96.9% of Bitcoin’s circulating supply is currently held in profit, increasing the likelihood of investor profit-taking. Meanwhile, high Bitcoin futures open interest remains elevated at $45.6 billion, often interpreted as a warning sign for a potential market correction.