Bitcoin is cooling off after briefly hitting a new all-time high near $123,000, as traders move to lock in gains and short-term holders send coins to centralized exchanges.
After days of consistent growth, the move indicates a change in momentum, which begs the question of whether Bitcoin (BTC) is about to enter a consolidation phase or is just taking a break before continuing its upward trajectory.
As Bitcoin reached the $123,000 mark, exchange inflows increased, per a July 14 analysis by Terekonchain, a contributor to CryptoQuant. Usually, this kind of movement is associated with profit-taking, particularly by certain whales and short-term holders. While it doesn’t necessarily indicate the end of the bull cycle, it often coincides with local tops.
The underlying bullish trend is still in place despite the increase in exchange netflows. Exchange-traded fund inflows continue, long-term holders remain dormant, and there are no indications of significant outflows from institutional wallets. This combination implies that rather than a more significant reversal, the current move is probably a temporary correction.
Miner behavior also supports this view. According to a parallel analysis by Arab Chain, another CryptoQuant contributor, miner activity has dropped again after rising in recent days. When miners reduce activity or hold on to their coins, it’s often seen as a sign that they expect prices to rise further.
Now that the cost of mining is lower than current market prices, miners may feel no pressure to sell, which helps reduce selling pressure overall. Since miner selling is frequently interpreted by on-chain investors as a bearish signal, their choice to hold is seen as supportive of the current trend.
As of this writing, Bitcoin is down roughly 4% over the last day, trading at $117,153. That drop follows a strong multi-day rally that saw prices rise from below $110,000 just a week earlier to a new high.
Bitcoin trading volume increased by 60% to $71.89 billion in the last day, indicating strong market activity around the new highs. According to Coinglass data, open interest in derivatives fell 2.6% to $85.95 billion, while volume increased 26.55% to $145.1 billion. This scenario is likely due to traders closing out positions after the rally.
From a technical point of view, Bitcoin is still in an uptrend but is now beginning to cool down. The price was rejected at the upper Bollinger Band, and the relative strength index has eased to 65 after reaching overbought levels close to 79, Bitcoin may retreat toward the $111,000-113,000 support zone, which corresponds to the mid-Bollinger Band, if selling persists.
The market might attempt another rally toward $123,000 if buyers step in. The trend is still upward for the time being, but many traders are keeping a close eye out for indications of a deeper correction or new momentum.
