Is Bitcoin’s Bullish Run Turning into a Bearish Yawn? 🤔

by

Key takeaways:

  • A hidden bearish divergence on the RSI suggests Bitcoin‘s bullish momentum might be taking a nap.

  • A CME gap between $114,000–$115,000 could act as a magnetic pull for the weary cryptocurrency.

  • Market cyclicality and various indicators indicate Bitcoin is in a distribution zone, where it might just decide to distribute its value a bit more evenly.

Bitcoin (BTC), that darling of digital currencies, is showing signs of potential weakness, much to the chagrin of those who had visions of sugar plums and six-figure valuations dancing in their heads. Three critical charts suggest that new weekly lows in July might be on the horizon. While the long-term trend remains intact, traders should perhaps consider stocking up on antacids for the short-term volatility that lies ahead.

Bitcoin currently exhibits a hidden bearish divergence between its price and the relative strength index (RSI), a momentum indicator that measures the strength of price movements. It’s like the RSI is telling Bitcoin, “You keep climbing, but I’m feeling a bit tired.”

A hidden bearish divergence occurs when the price makes higher highs, but the RSI forms equal or lower highs. This divergence hints at weakening momentum behind the rally, often leading to downside corrections. Think of it as Bitcoin saying, “I’ve been running for a while, maybe it’s time for a quick breather.”

This same pattern appeared in March 2024, after which Bitcoin saw a 20% price drop in the following days. Likewise, the ongoing divergence may lead to another corrective move, potentially pushing Bitcoin to fresh short-term lows. 📉

BTC CME Gap Looms as a Downside Magnet

A CME gap exists between $114,380 and $115,635 on the daily chart. CME gaps form when Bitcoin trades outside regular hours on the Chicago Mercantile Exchange (CME), leaving price voids that are often filled in active trading sessions. It’s like Bitcoin saying, “I need to go back and fill in the blanks.”

These gaps matter because historical data show that Bitcoin tends to “fill” them, i.e., the price retraces to cover the untraded range. In 2025, seven out of nine CME gaps have already been filled, with only this one and a smaller gap between $91,970 and $92,450 still open. The high fill rate underscores Bitcoin’s chances to revisit these levels, leading to a short-term dip to close the $114,000 bracket. 🎯

Bitcoin is in a Distribution Zone

Anonymous crypto analyst Gaah noted the Index Bitcoin Cycle Indicators (IBCI) has entered the distribution zone, a region historically linked with market euphoria and interim tops. This is the third such entry in the current bull cycle. It’s like the market is saying, “Let’s distribute the wealth a bit more evenly, shall we?”

The analyst explained that while the index touched only the lower base of the zone (80%), not the peak (100%) seen in past cycle tops, the reading still serves as a warning signal. Key indicators like the Puell Multiple and STH-SOPR (Short-Term Holder Spent Output Profit Ratio) remain below mid-levels, suggesting that retail speculation and aggressive profit-taking from miners haven’t peaked yet. Gaah added,

“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.”

Read More

2025-07-25 00:28