Bitcoin fake out? Research firm says it has turned its momentum over

According to market analytics firm SwissBlock, Bitcoin’s latest push to $120,000 has now fallen into a stall-out similar to a “failed breakout zone.” In a thread on July 31, the company said “the momentum didn’t ignite,” claiming that the overwhelming share of the coin sitting in the commercial flow that was realized and profits has been transformed into an opportunity to meet prices.

Earn profits and the Bitcoin Rally will be cooled

SwissBlock assembled the set fold as a pause rather than a breakdown. “Profit acquisitions are on the rise, but not as intense as the second half of 2024,” the company wrote, adding that the effect through July is “sufficient to cause rise and consolidation.” The tone is cooled and not yielding. “We see sales pressure, but not extreme. Think cooling, not yield.” That diagnosis rests on on-chain measurements of realized profits. This is an input that tends to expand into rallies as years of coins are spent powerfully, and a market structure in which bids absorb supply rather than overwhelmed.

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The most impressive data point in a thread is its breadth of profitability. “96% of the supply is profit,” SwissBlock points out, and GlassNode says. The ratio historically coincides with the happiness of the later cycle, but is mechanically self-limiting. With almost all holders on the green, potential sales pressure rises as “unrealized profits are captivating sellers.” As SwissBlock said, “The strong holders remain. But unrealized profits will attract sellers. Each bounce will bring about supply until demand returns.” The company claims the broader trend is “until it is, but the momentum needs to be reset.”

Beyond the realised flows on-chain, the company’s composite foundation reads neutrality with improved liquidity. “The BTC foundations are strong and stable,” writes SwissBlock, pointing out that a 60 (neutral) Bitcoin Basic Index reads, “network growth is cooled,” and “liquidity is recovering.” That mix usually supports a range of behavior, as the Post said, “environment that supports integration” (Bitcoin can be “long-splitting to the side”) over a surge in directionality. The meaning is that the market’s “breakout failure” risk reflects timing rather than trend reversal. For a continuous continuity, positioning and liquidity are still not aligned.

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The cross-asset context is equally subtle. “Altsesason is active, but under stress,” writes Swissblock, saying, “$ETH continues to structurally outperform BTC and holds this pullback better.” Its thin spinning highlights the selectivity of risk appetite and the vulnerability of momentum other than the biggest name. Historically, that pattern often precedes the decisive movement of Bitcoin that recharges or destroys spins.

The assessment of SwissBlock’s conclusions is carefully and constructively leaning. “Between profits is declining and sales pressure is being absorbed. BTC is preparing for a breakout, but we need to match momentum.” The company is hoping for a grind until that consistency arrives. Bidding continues to meet supply from profitable owners, easing profits and increasing liquidity in the background. If Bitcoin returns momentum to positive, the Swiss block claims that spillover could be powerful.

In short, today’s $115,000 drop appears to be a more utter rejection than a test of the market’s ability to consume profits and reset momentum without damaging the underlying uptrend. With 96% of supply being compressed in profits and widths, the next impulse may depend on whether liquidity and demand can be re-registered before making profits. For now, the SwissBlock message is clear. You need to get a breakout, but it’s not expected.

At the time of pressing, BTC traded for $115,452.

Featured images created with dall.e, charts on tradingview.com