Bitcoin News Today: Bitcoin consolidation deepens as bull score drops 25% and profit-taking rises

Bitcoin’s recent rally is showing signs of stalling, according to on-chain analytics firm CryptoQuant, which has highlighted cooling momentum in the market. The firm’s proprietary Bull Score Index—a measure of market strength—has dropped from 80 to 60 in recent weeks, signaling a reduction in bullish enthusiasm, though a generally positive tone still persists [1]. Analysts attribute the slowdown to two key factors: profit-taking following Bitcoin’s recent all-time high and a typical seasonal dip in trading volumes that occurs during the summer months [1].

On-chain data supports the cautious outlook. One notable sign is the stagnation in stablecoin liquidity, which often indicates the flow of new capital into the crypto market. Tether’s circulating supply has risen by $9.6 billion over the past 60 days, but the rate of growth has slowed, suggesting fewer fresh inflows from traders and institutions [1]. Additionally, CryptoQuant’s profit margin signal has turned red, showing that a large portion of market participants have recently locked in gains. This shift from unrealized to realized profits often weakens buying pressure and increases the likelihood of short-term corrections [1].

Exchange inflows are also contributing to the bearish sentiment. Recent net inflows to exchanges have reached their highest levels since July 2024, indicating that traders may be preparing to offload holdings, according to data from Binance. This trend typically signals a shift in market sentiment from buyers to sellers and could lead to price consolidation or a correction [2]. Meanwhile, the futures market reflects similar fragility. Open interest and net taker volume remain under pressure, suggesting the broader crypto market may be entering a late-cycle phase [3].

Seasonal trends are also playing a role. Historically, trading volumes tend to dip following the summer months, reducing liquidity and increasing price volatility. Bitcoin has already fallen below its $120,000 peak, raising concerns about the sustainability of the rally. QCP Capital has noted signs of technical fatigue and weak performance across the broader crypto ecosystem [4]. Altcoins are also showing mixed signals. For instance, Conflux (CFX) surged by 10% in 24 hours but stalled near a key $0.23 resistance level, highlighting the broader uncertainty among traders [5].

Despite the short-term concerns, analysts do not see a prolonged bearish trend forming. Instead, the current phase is viewed as a consolidation period within a broader bull market. Such pauses are common after sharp price increases and often allow the market to reset before the next major move. CryptoQuant Research Director Julio Moreno believes a U.S. Federal Reserve interest rate cut in September could act as a catalyst, potentially reigniting buying momentum if macroeconomic conditions align [1].

Until then, Bitcoin remains in a holding pattern, with traders closely monitoring both macroeconomic signals and on-chain flows for the next potential breakout. While the fundamental drivers behind Bitcoin’s rally remain intact, the mixed on-chain and derivatives signals suggest caution is warranted. The coming weeks will be crucial in determining whether this consolidation is a temporary pause or the start of a more sustained correction [2].