Bitcoin Rally Loses Momentum as Key Indicators Turn Bearish
Bitcoin’s 21-week EMA has held as resistance near $110,000, with on-chain data showing short-term holders underwater and inflows dwindling to levels last seen in March corrections[1].
Multiple technical and on-chain signals point to fading upside momentum. Short-term holder realized losses have spiked alongside bearish divergences on RSI and MACD across daily and 4-hour charts[1][2]. The price action below $113,000 keeps the market in a bearish regime, per on-chain analysis, with the 21-week EMA acting as a key trend filter[1]. Exchange inflows have trended lower, mirroring patterns that preceded 10% pullbacks earlier this year[1]. A long-term trend indicator recently flipped bearish, prompting analysts to question the bull market’s continuation[5]. Miner hash rate trends show positive correlation with price, but recent SMA crossovers signal ongoing capitulation risks absent a recovery catalyst[6].
On-Chain Signals Weaken
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Short-term holders now face losses, a condition that historically coincides with further downside. Data indicates selling pressure dominated recent sessions, with realized losses accelerating[1]. This setup echoes March, when similar inflow declines led to deeper corrections below rebound highs[1]. The $110,000-$112,000 range forms a critical support cluster; a break lower would confirm accelerated bearish phase[1]. Current EMA bands place fair value between $100,000 and $110,000, aligning with observed price confinement[1].
Technical Divergences Emerge
RSI on daily charts shows bearish divergence, where price highs fail to match momentum peaks[2][3]. MACD on 4-hour timeframes confirms this with looming bear flags, targeting 200-300 week moving averages as support[2]. Volume-based On-Balance Volume (OBV) lacks confirmation on recent highs, signaling rally exhaustion[3]. Weekly RSI has formed lower highs near peaks in past cycles, a pattern repeating here as momentum decouples from price[4]. These divergences often precede turning points, though weekly frames filter short-term noise for cycle-level reads[4].
Market Structure Risks
Pi Cycle Top Indicator remains untriggered, with the 111-day MA approaching but not crossing 2x the 350-day MA, leaving room for extension[6]. Yet MVRV Z-Score and Stock-to-Flow models highlight overextension risks when paired with sentiment gauges like Fear & Greed[3][6]. Hash rate’s 30-day SMA over 60-day SMA would mark miner capitulation end, but current trends lag price recovery[6]. $100,000 support remains untested as a cycle low, with potential for breaks lower if inflows stay subdued[1].
Historical Context
Bearish RSI divergences have appeared near all-time highs in prior cycles, with price continuing briefly before reversals[4]. OBV failures on new highs signaled tops in past rallies, as buying volume failed to sustain[3]. Short-term holder losses have extended corrections, forcing capital preservation over aggressive positioning[1]. Fed policy shifts often align with cycle turns, a factor under watch alongside these metrics[1].
Crypto Market Implications
Custodial risks elevate as exchange inflows dwindle, underscoring self-custody benefits for long-term holders amid sell-off phases[1]. On-chain forensics via tools like Glassnode reveal short-term holder capitulation patterns, with tracing showing concentrated selling from recent buyers[1]. Historical recovery from similar corrections averages 20-30% drawdowns before catalysts emerge, though no direct data on current cycle depth[1][6].
Risks & Uncertainties
Downside targets at 200-300 week MAs carry retest risks if $100,000 fails, potentially extending losses 10-20%[1][2]. Uncertainty persists around Fed policy timing, which could delay bull resumption[1]. Recovery status of capital in capitulation events remains unconfirmed beyond on-chain loss aggregates[1].
Pi Cycle holds, but divergences demand caution-momentum leads price.
[1] https://www.moomoo.com/news/post/61681609/a-deep-dive-into-bitcoin-bear-market-on-chain-and[2] https://www.youtube.com/watch?v=kYwPrPk3CG8
[3] https://www.binance.com/en/square/post/13365459333305
[4] https://www.youtube.com/watch?v=ZmOxLXxUnKk
[5] https://www.tradingview.com/news/cointelegraph:35358cdaf094b:0-this-indicator-suggests-we-re-out-of-the-bitcoin-bull-market/
[6] https://www.bitcoinmagazinepro.com/blog/top-10-bitcoin-indicators-for-smart-trading-decisions/
