Bitcoin’s price mounted a relief rally this week, gaining nearly 7% from its early-July lows and breaking out of a bullish falling wedge pattern. The move pushed BTC back above a key bull market trendline, but a complex mix of on-chain and derivatives data warns that the bounce may not yet signal a trend reversal.
The breakout and its limits
On the 4‑hour chart, the breakout carried the price above the trendline, yet resistance near $62,260 capped the advance. Short‑term indicators slipped into overbought territory, and volume failed to spike—typically a prerequisite for a sustained breakout. On the daily timeframe, Bitcoin’s RSI showed a bullish divergence against price, hinting at building momentum, but the weekly candle remained below a significant resistance band with only the weekend left before the close. A corrective phase could still drag the price back to test the psychologically important $60,000 support.
On‑chain foundation vs. derivatives froth
Data from CryptoQuant paints a divided picture. Spot exchange outflows continue, indicating that coins are being moved away from ready‑to‑sell reserves. The Adjusted Sell‑side Risk Ratio has plummeted into a rare accumulation zone, a level last seen before the major expansions of 2019, 2020, and 2023, suggesting long‑term holders are reluctant to sell. Meanwhile, derivatives markets tell a more speculative story: open interest is rising and collateral is flowing back into leveraged venues after a recent reset, while whale behavior is turning mixed. Wallets holding 100–1,000 BTC are distributing at their fastest pace in the dataset, and even the largest cohort (1,000–10,000 BTC) has slowed its accumulation by 29% compared to two weeks ago. Whale deposits have also shifted from Binance to Kraken, Bitfinex, and Coinbase Prime.
Technical context
The daily trend remains bearish. BTC trades well below its 50‑day (~$67,347), 100‑day (~$71,053), and 200‑day (~$74,949) moving averages, all of which slope lower. The first overhead supply zone sits at $63,000–$64,000, the breakdown area from late May. A reclaim of $63,000 would merely shift the structure to neutral; a move above the 50‑day MA would be the first real trend‑change signal. RSI has recovered to 46 from oversold levels, but volume on the bounce is only modest—lighter than the capitulation sell‑off of late May.
The market currently sits in an “in‑between” state: long‑term supply dynamics are constructive, yet rising leverage and weakening whale support could trigger sharp short‑term swings. Unless spot demand absorbs the overhead supply and whales resume strong accumulation, the relief rally risks fading back into the downtrend.
