- Bitcoin faced a second rejection at $117K, breaking the parallel channel as the Stoch RSI printed a bearish cross near overbought levels.
- On-chain metrics show rising Coin Days Destroyed, signaling long-term holder distribution, while active addresses dropped to an 11-month low.
- There is some underlying weakness in the short term, but the weekly Stoch RSI is approaching a bullish cross in October, which we have seen previously kick off strong rallies historically.
Bitcoin had another rejection up at the $117,000 resistance level, which led to a short-term bearish shift; however, the larger bullish structure remains intact.
Resistance, Rejection, and Short-Term Weakness
CrypFlow reported that Bitcoin (BTC) failed to close above $117,200, marking its second rejection near this zone. The inability to break higher forced the price out of an ascending parallel channel, indicating that momentum is currently tilting downward.
The Stochastic RSI supported this view, printing a bearish crossover in the overbought region. With %K at 78.43 and %D at 87.40, the move has not yet been confirmed below 80, but remains a cautionary sign. Historically, these setups have often preceded near-term downside moves when combined with rejection at strong resistance.
Bitcoin is presently trading around $116,000, with $112,500 as the next major support level. A definitive break below this may open the gates for a deeper correction, which may extend out towards $110,000 before any bounce can be anticipated.
On-Chain Distribution Signals Profit Taking
CryptoOnchain added another perspective, pointing to a bearish divergence across key on-chain metrics. The 30-day moving average of Coin Days Destroyed (CDD) has reached its 18-month high. This suggests the activity of long-held coins, which usually represents profit-taking among long-term holders when markets are in an all-time high.
Such behavior indicates that experienced investors are distributing their holdings while price trades near all-time highs, leaving newer participants to absorb the supply. Historically, these distribution phases align with short-term cooling periods even in strong market cycles.
In the meantime, active addresses have dropped to an 11-month low, reflecting poor new user adoption. With the failure to expand participation, the market cannot put a sustainable foundation under price rallies.
Macro Bullish Structure Remains Intact
Despite these short-term pressures, CrypFlow emphasized that the macro structure remains favorable for bulls. The weekly Stochastic RSI is nearing a bullish crossover, expected around October. Historically, this signal has marked the beginning of major rallies, often followed by strong performance from altcoins.
Network activity also reflects a surge in transactions, though much of it comes from speculative protocols such as Runes. While these transactions increase congestion, their low average size shows limited real economic value. This dynamic suggests that the recent rise in activity is more speculative than fundamental.
Together, the technical rejection at $117K and bearish on-chain signals suggest possible short-term weakness. However, the larger cycle trend remains upward, with weekly momentum poised to confirm strength in the coming weeks.
