Bitcoin Stalls Under $120K as On-Chain Data Reveals Cooling Demand—Time to Buy the Dip?

Bitcoin's price action hits a wall below the $120K psychological barrier—while blockchain metrics flash warning signs for bulls.

On-chain fatigue sets in

Network activity and exchange flows suggest institutional players are tapping the brakes after Q2's parabolic rally. Retail FOMO? Nowhere to be found.

The institutional slowdown

Whale wallets aren't accumulating at previous rates, and miner outflows hint at profit-taking. Even the 'diamond hands' crowd seems to be waiting for clearer signals.

Meanwhile in TradFi land...

Wall Street analysts suddenly remember Bitcoin's volatility exists—just as their quarterly 'crypto is dead' reports hit the printers. How convenient.

Next moves

Watch for either a demand resurgence above $122K or cascading liquidations if we break $115K. Either way, the market's about to separate the HODLers from the tourists.

Regional Premiums Point to Lower Demand from US and South Korea

According to a post by CryptoQuant analyst Arab Chain, the Coinbase Premium Index, which measures the price difference between bitcoin on Coinbase and other global exchanges, has failed to climb significantly despite BTC reaching record highs in July.

The index remained around levels seen in June, suggesting that US investors using Coinbase have not been aggressively buying Bitcoin during the rally.

Arab Chain noted that the index’s movement toward negative territory alongside Bitcoin’s price increase may indicate profit-taking among American investors. This implies that some may be anticipating a correction before re-entering the market.

Similarly, the Korea Premium Index has declined, signaling reduced demand from retail investors in South Korea. This index reflects the spread between Bitcoin’s price on Korean exchanges and global averages.

The negative trend suggests Korean traders have been selling below the global average, with weak buying interest on local platforms. Arab Chain interprets this as retail traders possibly waiting for a discount to reenter the market, indicating caution among individual investors in Asia’s key crypto hub.

Exchange Inflows Suggest Rising Sell Pressure

Adding to the picture, another CryptoQuant contributor, ShayanMarkets, highlighted a notable development in BTC’s on-chain activity. The latest data reveals Bitcoin has experienced its largest net inflow to exchanges since July 2024.

Typically, large inflows signal that holders are preparing to sell, increasing supply on trading platforms and contributing to potential downward price pressure. ShayanMarkets explained that this behavior, especially when occurring NEAR all-time highs, may indicate institutional or fund-driven profit-taking.

Such moves often align with efforts to reduce risk exposure during overextended market rallies. Historically, spikes in exchange inflows have been followed by price corrections, making this a trend to monitor closely.

However, the redistribution of capital from Bitcoin into other assets may benefit the broader crypto market. The analyst noted that altcoins could see renewed interest as funds rotate out of BTC. If the trend continues, traders may observe increased volatility and speculative movement across alternative tokens in the short term.

Featured image created with DALL-E, Chart from TradingView