Bitcoin Fails to Hold $113,000 as Capital Shifts to Ethereum
Bitcoin has dropped to $111,139, a 1.6% decline over the past 24 hours, failing to maintain the critical $113,000 level. This has led to speculation regarding a potential cycle top for Bitcoin, with indications of capital rotation into Ethereum.
Divergence Signals Echo the 2021 Cycle Top
A bearish divergence noted on Bitcoin’s weekly chart shows that while prices are reaching higher highs, the Relative Strength Index (RSI) is trending lower, indicating weakening momentum. This pattern mirrors the divergence observed before the 2021 market peak.
Short-Term Optimism, Long-Term Caution
- Long-Term Holders are distributing their assets.
- Short-Term Holders are accumulating aggressively.
- Whales are indecisive and not committing significant inflows.
- Exchanges have mild outflows without signaling large-scale distribution.
Experts suggest that until whales make decisive moves, Bitcoin's upside may remain limited, favoring Ethereum-led market rotations.
Liquidity Scarcity: A Fragile Bull Run
Bitcoin’s illiquid supply has reached historically high levels, while liquid supply has decreased significantly, supporting higher prices but creating market fragility. Analysts warn that sudden sell-offs by whales or institutions could lead to sharp corrections.
Two potential scenarios are forecasted:
- If illiquid supply continues to rise, Bitcoin could approach $150,000 in 2025.
- If liquid supply increases due to sell-offs, Bitcoin could drop to the $90,000–$100,000 range.
