Bitcoin News Today: Bitcoin Bulls Target $122K Liquidity Cluster as Seasonal Trends and 80% ETF Inflows Decline Pose Breakout Risks

Bitcoin’s price action has drawn attention as bulls target a critical liquidity cluster near $122,000, yet structural and seasonal headwinds may hinder a sustained breakout. Recent on-chain data and market structure suggest that while short-term upward momentum persists, broader indicators point to a cooling in institutional and retail participation, raising questions about the sustainability of the rally [1].

The $122,000 level is a focal point for Bitcoin bulls, where approximately $2 billion in short liquidations are clustered, according to CoinGlass data. This zone coincides with a supply area between $121,400 and $123,200, representing prior resistance levels. A successful breakout could trigger a sweep of external liquidity built over the past two weeks, reinforcing the bulls’ case. However, a failure to decisively surpass $123,200 risks validating a bearish double-top pattern near the all-time high, signaling buyer fatigue [1].

Technical indicators underscore the fragility of the current bullish scenario. Bitcoin’s relative strength index (RSI) has fallen sharply to 51.7 from 74.4, reflecting weakening momentum, while daily trading volumes have dropped to $8.6 billion—a 40% decline from recent averages. Meanwhile, spot ETF flows, once a key driver of institutional demand, have cooled significantly. Weekly net inflows into Bitcoin ETFs fell 80% to $496 million, compared to $2.5 billion a week prior, suggesting a retreat in institutional appetite [1].

Seasonality further complicates the outlook. Historical August returns reveal a bearish trend, with over 60% of the month closing in the red and an average return of -2.56%. This seasonal drag, combined with declining active addresses and transfer volumes, raises concerns about a potential retracement in the coming weeks. On-chain metrics also highlight a 96.9% profit balance for Bitcoin’s supply, amplifying the risk of profit-taking and exacerbating short-term volatility [1].

Despite these challenges, catalysts could yet alter the trajectory. The White House’s anticipated release of a strategic crypto policy report on Wednesday may introduce a Bitcoin Reserve Framework and delta-neutral accumulation strategies, potentially boosting spot ETF flows. Additionally, the Federal Open Market Committee (FOMC) meeting this week, though unlikely to deliver a rate cut, could see dovish commentary from Fed Chair Jerome Powell. A hint of September easing could spur markets to front-run expectations, driving Bitcoin above $123,000 and testing new highs [1].

Analysts caution, however, that these outcomes depend on execution. The absence of robust buy-side liquidity until $114,500 means that any near-term pullback could accelerate. A retest of the $117,000 support—where $100 million in long positions were liquidated this week—would test the resilience of the 100-day EMA, which currently acts as a dynamic floor. For now, the path of least resistance remains higher, but the convergence of fading momentum, seasonal trends, and profit-taking pressures underscores the need for caution among bullish participants [1].

Source:

[1] Cointelegraph, "Bitcoin Eyes $123K But Q3 Data Could Stall Price Discovery", (https://cointelegraph.com/news/bitcoin-bulls-aim-to-chase-liquidity-at-dollar122k-but-q3-seasonality-could-stall-breakouts)