Bitcoin Might Take Longer To Break $122k, And Here’s Why

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Bitcoin bulls are hopeful, but is this enough? Here are a few headwinds that might make $122k difficult to break through for BTC.

Bitcoin bulls have set their sights on the $122,000 mark, and are hoping to trigger a massive wave of short liquidations. There are now around $2 billion in shorts clustered at that level, and a breakout could set off a bullish bomb.

However, several headwinds may slow this traction, including seasonal trends, weak trading volumes and an ongoing decline in ETF inflows.

Bitcoin Targets $122K

Over the past week, Bitcoin has shown signs of resilience despite brief dips. It dropped below $117,000 on Tuesday, clearing liquidity between $117,000 and $119,000.

This is a common setup before larger directional moves. Still, the 100-day EMA on the four-hour chart is holding up as support and is keeping short-term downside risks in check.

Bitcoin is consolidating underneath $122,000, Source: TradingView

Meanwhile, one of the major technical drivers behind Bitcoin’s upward move is a large sell-side liquidity pocket between $120,000 and $122,000. Many traders have placed stop-loss orders at this level, and are hoping to protect short positions.

In essence, if Bitcoin reaches this zone, those orders could trigger liquidations and propel the price even higher.

The daily supply zone between $121,400 and $123,200 also adds weight to this level. It represents a strong area of historical resistance and BTC would need to break through this zone to validate a bullish breakout.

CoinGlass data shows that short positions worth $2 billion are at risk of liquidation if BTC touches $121,600. Put simply, that is the bale of hay that Bitcoin bulls are chasing right now.

Is Bitcoin Losing Steam?

Despite the charts showing optimism at first glance, several warning signs are showing that Bitcoin’s bullish momentum might be weakening. One major indicator is the drop in Bitcoin’s daily RSI, which fell from 74.4 to 51.7.

That signals exhaustion in buying pressure and when combined with slowed down ETF flows, the bulls really might be losing steam.

Relatively weaker flows for the ETF market, Source: Farside

Last week, spot BTC ETFs saw just $496 million in inflows, compared to $2.5 billion the week before. This stands as an 80% drop and shows that institutional investors are stepping back, at least for now.

Daily trading volume has also slipped to $8.6 billion, which means that any kind of big breakout could be harder to sustain.

Augusts Are Historically Bloody

Historical data also doesn’t do much to help matters. Over 60% of Augusts have ended in the red for Bitcoin, with an average return of just 2.56%. This means that Q3s are usually one of the bloodiest quarters for Bitcoin over the years.

On-chain data shows fewer active addresses and lower transfer volumes, which have added to the concerns. Combined with a market where over 96% of supply is in profit, the odds of a correction appear to be stronger, and investors may start taking profits soon.

If Bitcoin cannot break past the $123,200 resistance zone, it may confirm a double-top pattern. This could stall price discovery and push Bitcoin back toward key support zones.

Current levels to watch on the downside include $116,000–$114,000 which contains a fair value gap that could be filled, alongside $112,000, which is a likely target if the bulls continue to drag their feet.

Underneath this, the $105,400 zone contains the short-term holder cost basis, while $93,000 is the yearly open price and a likely bottom area.