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Bitcoin Price Prediction: BTC May Experience a Short-term Pullback, On-chain Data and Market Sentiment Show Signs of Cooling
Although Bitcoin is overall in a strong rising trend, recent on-chain indicators and market sentiment show pullback warning signals. A large amount of Bitcoin flowing into exchanges, increased Whale selling pressure, and weak technicals may suggest that the price will enter a consolidation or falling phase in the short term.
Exchange Bitcoin reserves rise, triggering market alert According to a report released by CryptoQuant analyst ShayanMarkets on July 20, the current Bitcoin reserves on centralized exchanges have risen to their highest level since June 25. This typically reflects that investors are taking profits and moving assets to exchanges in preparation for selling, thereby increasing potential selling pressure in the market.
Another analyst from CryptoQuant, Darkfost, pointed out that the transfer volume of whales to exchanges has also increased significantly. From July 14 to 18, the total inflow of whales, calculated as a monthly average, rose from $28 billion to $45 billion. This inflow trend has also been seen before past Bitcoin price peaks, indicating a possibility of further pullback in the short term.
Overheated sentiment may trigger increased volatility Despite signs of a pullback, CryptoQuant's "Bitcoin Bull Sentiment Index" remains as high as 80, in the extremely bullish range. Analyst Arab Chain warns that this "overheated" state of sentiment could trigger increased volatility, especially during the pullback phase after reaching a historic high.
As of the time of writing, Bitcoin is priced at $118,307, having risen 0.4% in the past 24 hours, but it has pulled back over $4,500 from the all-time high of $122,838 set on July 22. In the past 7 days, Bitcoin has fallen 2.5%, but it has still accumulated a rise of 14% over the past 30 days.
Technical indicators show a weakening market momentum From a technical perspective, the Bitcoin daily chart shows that the price momentum has weakened in the short term. The price is near the middle band of the Bollinger Bands, with the current 20-day Simple Moving Average (SMA) support level at approximately $114,453, while the lower band support is at $105,383, and the upper band resistance is at $123,522. If Bitcoin breaks below the middle band and SMA, it may test the support in the 105K region.
The trading volume has fallen compared to recent highs, further supporting the view that the market is entering a profit-taking period. The Relative Strength Index (RSI) is currently at 68.11, slightly below the overbought zone, indicating that upward momentum is slowing.
Conclusion and Market Outlook Overall, although the market maintains a long-term bullish sentiment, both on-chain data and technical indicators are releasing potential adjustment signals in the short term. If Bitcoin falls below the support around 114K, the next target will be 105K; however, if the price breaks strongly above 122K, the bearish expectations may be completely negated, continuing the bull market trend.
Conclusion: As the Bitcoin price fluctuates at a high level, the short-term adjustment risk in the market is accumulating. Crypto investors need to pay attention to on-chain capital flows, whale movements, and key technical levels, while being cautious of pullbacks triggered by overheating sentiment, and also prepare for potential breakthroughs.