Key Takeaways
Why is Bitcoin unlikely to see a July-style leverage flush?
Bitcoin divergences are stacking up. BTC.D is regular at 59%, ETFs proceed flowing, and LTH conviction is rising, maintaining weak palms in examine.
What helps BTC’s potential breakout above $124k?
Heavy institutional spot inflows, minimal alt rotation, and underlying bid arrange a clear path for worth discovery.
Bitcoin [BTC] is hovering simply 1.3% beneath its $124k all-time excessive, and all eyes are on whether or not it will probably punch by. Traditionally, this zone has carved out heavy resistance, which may mood investor danger urge for food.
Reinforcing this, Open Curiosity (OI) has hit a recent $90 billion ATH, marking a 7% bounce from the final peak, whereas 46k BTC have flowed from STHs to exchanges, priming BTC for a possible volatility loop.
Nonetheless, divergences are stacking up. BTC.D is holding 59%, not like the August high when cash rotated into alts. ETFs are nonetheless flowing in, with $985 million hitting on the third of October, maintaining bids underneath BTC sturdy.
Battle traces drawn as Bitcoin checks resistance
Bitcoin has kicked off This fall as buyers hoped.
In simply over every week, BTC climbed from $108k to $122k, lifting its provide in revenue from 84% to 99.5% and flipping above the short-term holder (STH < 155 days) on-chain value foundation of $111k.
Merely put, the 48k BTC moved by STHs at $120k wasn’t random. Actually, it was the biggest 24-hour STH-to-exchange spike ever, displaying weak palms are being shaken out as BTC approaches a key resistance zone.
Supply: CryptoQuant
Layer on overheated derivatives, and it’s a basic bull entice setup.
Living proof: Bitcoin’s the 14th of July all-time excessive. OI peaked at $87 billion, whereas STH NUPL (Web Realized Revenue/Loss) hit 0.15, displaying STH optimism. Nonetheless, as BTC topped $122k, overexposed longs received flushed.
The consequence? OI slid to $80 billion, STH NUPL dropped to 0.05 in two weeks, syncing with BTC’s 8%+ dip to $107k. So, with the Lengthy/Brief Ratio nonetheless skewed bullish, are we taking a look at one other textbook lengthy liquidity sweep?
Divergences construct as BTC bids keep supported
To maintain the rally, BTC must diverge from the earlier two ATHs.
On the upside, Bitcoin dominance (BTC.D) continues to be holding 59% of the market cap, which quantities to roughly $2.48 trillion, whereas Ethereum dominance (ETH.D) stays effectively beneath the 15% peak seen in late August.
In the meantime, the share of BTC held for 18–24 months has jumped to five% for the primary time since March 2024. In different phrases, extra cash are transferring into long-term palms, displaying rising conviction in Bitcoin’s upside.
Supply: CryptoQuant
In brief, these divergences are ruling out a July-style leverage flush.
Bitcoin’s retest of $124k is backed by heavy spot institutional inflows, minimal rotation into alts, and powerful LTH conviction, establishing a clear path for worth discovery, whereas additionally maintaining a bull entice unlikely.
