2 Worrying Signs for Bitcoin (BTC) Despite the Expected Rate Cuts

As of September 18, 2025, Bitcoin (BTC) is trading at $117,308, reflecting a 0.87% increase from the previous close. You can find the latest price update on Binance.

Stock market information for Bitcoin (BTC)

- Bitcoin is a crypto in the CRYPTO market.
- The price is 117308.0 USD currently with a change of 1006.00 USD (0.01%) from the previous close.
- The intraday high is 117935.0 USD and the intraday low is 114924.0 USD.

Recent analyses highlight several factors influencing Bitcoin's price trajectory:

1. Institutional Accumulation: Metaplanet's recent acquisition of 1,009 BTC, totaling $112 million, has contributed to a supply squeeze, with corporations now holding approximately 6% of Bitcoin's total supply. (coinmarketcap.com)

2. Wall Street Valuation Shift: JPMorgan has declared Bitcoin "undervalued compared to gold," citing reduced volatility and setting a fair price target of $126,000. (coinmarketcap.com)

These developments suggest a bullish outlook for Bitcoin, driven by increased institutional interest and favorable market valuations.

While the anticipation of interest rate cuts by central banks has generally fueled positive sentiment across financial markets, including the cryptocurrency space, Bitcoin (BTC) faces two worrying signs that could temper its bullish momentum. Despite the favorable macroeconomic backdrop, technical and on-chain data reveal potential vulnerabilities that traders and investors should carefully consider. Let's delve into these concerning factors.

Recent Bitcoin Price Action: A Rollercoaster Ride

Bitcoin has experienced significant volatility in recent weeks. After reaching a high of $125,000 in early September, fueled by positive inflation data and increasing expectations of rate cuts, the price has since retraced to around $117,308. This pullback has raised concerns among some analysts, who point to potential profit-taking and exhaustion among buyers. The initial surge appeared robust, but the subsequent decline suggests that the market might be lacking the sustained momentum required to maintain such high levels. Furthermore, news related to regulatory uncertainties in certain jurisdictions contributed to brief sell-offs, highlighting Bitcoin's continued sensitivity to external factors.

The daily price charts reveal a series of volatile swings. Early in the month, Bitcoin pushed aggressively upwards, driven by institutional interest following the approval of several spot Bitcoin ETFs in new markets. This rally was characterized by high trading volumes and strong bullish candles. However, as the price approached $125,000, selling pressure increased significantly. This was evident in the appearance of long upper wicks on the daily candles, indicating that buyers were struggling to maintain control. The subsequent days saw a steady decline, with Bitcoin breaking below several key support levels. This downward trend was punctuated by occasional rallies, but these were quickly met with renewed selling pressure. The overall price action has been choppy and indecisive, suggesting that the market is struggling to establish a clear direction.

Zooming out to the weekly chart provides a slightly different perspective. While the recent pullback is concerning, it's important to note that Bitcoin is still trading significantly above its levels from earlier in the year. The long-term trend remains upward, supported by strong fundamentals such as increasing adoption, limited supply, and growing institutional interest. However, the weekly chart also shows signs of potential weakness. The Relative Strength Index (RSI) is currently hovering around the 70 level, indicating that Bitcoin may be approaching overbought territory. This suggests that a further correction is possible, especially if the macroeconomic outlook becomes less favorable.

Worrying Sign #1: Bearish Divergence on the Daily Chart

One of the most concerning technical indicators is the emergence of a bearish divergence on the daily chart. A bearish divergence occurs when the price of an asset makes higher highs, but an indicator like the RSI or MACD makes lower highs. This suggests that the bullish momentum is weakening and that a trend reversal may be imminent. In Bitcoin's case, while the price reached a new local high of $125,000, the RSI failed to confirm this move, instead forming a lower high. This divergence indicates that the buying pressure behind the rally was not as strong as it appeared, and that the market may be poised for a correction.

Let’s break down the divergence in more detail. The RSI, a momentum oscillator that measures the speed and change of price movements, is a crucial tool in identifying potential trend reversals. When the RSI reaches above 70, it indicates an overbought condition, suggesting that the asset might be overvalued and due for a pullback. Conversely, an RSI below 30 indicates an oversold condition, hinting at a potential bounce. In this context, the bearish divergence is particularly significant. The price made a series of higher highs, suggesting continued bullish momentum, but the RSI failed to follow suit. Instead, it painted lower highs, signaling that the buying pressure was waning. This discrepancy between price action and momentum is a classic warning sign for traders. The divergence suggests that the underlying strength of the bullish trend is diminishing, making it more susceptible to a reversal. Traders often interpret this as a signal to reduce long positions or even consider initiating short positions, anticipating a price decline.

Adding to the concern is the behavior of the MACD, another popular momentum indicator. The MACD (Moving Average Convergence Divergence) measures the relationship between two moving averages. It consists of the MACD line, the signal line, and a histogram that represents the difference between these two lines. A bearish crossover occurs when the MACD line crosses below the signal line, indicating a potential shift in momentum from bullish to bearish. In the case of Bitcoin, the MACD has been trending downwards in recent days, and a bearish crossover appears increasingly likely. This further reinforces the bearish divergence observed with the RSI, adding weight to the argument that a correction is on the horizon.

Traders closely monitor these technical indicators because they often provide early warnings of potential trend reversals. The combination of a bearish divergence on the RSI and a potential bearish crossover on the MACD is a strong signal that the bullish momentum behind Bitcoin's recent rally may be fading. While it doesn't guarantee a sharp decline, it does increase the probability of a significant pullback, particularly if other negative catalysts emerge in the market.

Commenting on this development, prominent crypto analyst @TechAnalysisPro stated, "The bearish divergence on the BTC daily chart is hard to ignore. Coupled with the potential MACD crossover, it suggests we could see a significant pullback in the coming days. Traders should exercise caution and consider tightening their stop-loss orders."

What this could mean is a potential correction towards the $108,000 - $110,000 range in the short term. A break below this level could trigger further selling pressure, potentially leading to a retest of the $100,000 support zone.

Worrying Sign #2: Decreasing On-Chain Activity

Another concerning trend is the decrease in on-chain activity, particularly the number of active addresses and transaction volume. While Bitcoin's price has been fluctuating, the number of users actively using the network has been declining. This suggests a lack of new participants entering the market and a potential decrease in overall demand. On-chain metrics provide valuable insights into the underlying health and activity of the Bitcoin network. Active addresses represent the number of unique addresses that have been involved in transactions within a specific timeframe. A decline in active addresses suggests that fewer people are actively using Bitcoin, which could indicate a decrease in adoption or a waning interest in the cryptocurrency. Transaction volume measures the total amount of Bitcoin being transferred across the network. A decrease in transaction volume could indicate that less economic activity is taking place on the Bitcoin blockchain, which could be a sign of reduced demand or liquidity.

The recent decline in on-chain activity is particularly concerning because it contradicts the narrative of increasing institutional adoption. While institutions have been accumulating Bitcoin, their activity alone may not be enough to sustain the price at current levels. Sustained price appreciation requires broader participation from retail investors and everyday users. If on-chain activity continues to decline, it could indicate that the market is becoming increasingly reliant on institutional flows, which can be unpredictable and subject to sudden shifts in sentiment. Furthermore, a decrease in on-chain activity could lead to reduced liquidity in the market. Liquidity refers to the ease with which an asset can be bought or sold without significantly affecting its price. Lower liquidity can lead to increased volatility, making it more difficult for traders to execute large orders without incurring significant slippage. This can create a negative feedback loop, where declining on-chain activity leads to reduced liquidity, which in turn leads to increased volatility and further discourages participation.

Several factors could be contributing to the decrease in on-chain activity. One possibility is that the high transaction fees on the Bitcoin network are deterring smaller transactions. While transaction fees have decreased from their peaks in previous bull markets, they can still be relatively high compared to other cryptocurrencies. This can make it uneconomical for users to make small payments or engage in frequent trading activity. Another possibility is that users are simply holding their Bitcoin in cold storage, waiting for prices to rise further. While this is a positive sign in terms of long-term conviction, it does contribute to a decrease in on-chain activity in the short term. Finally, the increasing popularity of centralized exchanges could also be playing a role. Many users prefer to keep their Bitcoin on exchanges, rather than holding it in their own wallets, because it is more convenient for trading and other activities. However, this means that fewer transactions are being recorded on the Bitcoin blockchain.

Commenting on this trend, on-chain analyst @CryptoMetricsGuy stated, "The recent decline in active addresses and transaction volume is a red flag. It suggests that the current price levels may not be sustainable and that a correction is possible. We need to see a rebound in on-chain activity to confirm the bullish trend."

This could mean that a significant portion of Bitcoin's price appreciation is based on speculation and institutional buying, rather than organic user growth and adoption. A sustained decrease in on-chain activity could indicate a lack of real demand and could make Bitcoin more vulnerable to a correction. Furthermore, reduced on-chain activity could lead to decreased network security, as fewer miners are incentivized to participate in securing the blockchain.

Technical Chart Patterns

Currently, no clear and dominant technical chart pattern is visibly forming that suggests imminent breakout. The daily chart shows a degree of consolidation following the pullback, forming a potential symmetrical triangle. A symmetrical triangle is formed by converging trend lines, and it typically indicates a period of indecision in the market. The price could break out in either direction, depending on which trend line is broken first. However, given the bearish divergence and decreasing on-chain activity, a breakdown from the triangle seems more likely.

If the price breaks below the lower trend line of the triangle, it could trigger a further sell-off towards the $108,000 - $110,000 support range. Conversely, if the price breaks above the upper trend line, it could signal a continuation of the bullish trend. However, given the negative technical indicators, a sustained breakout seems less probable.

Key Support and Resistance Levels

Traders and analysts are closely watching the following key support and resistance levels:

Resistance:

- $125,000 (recent high)

- $130,000 (psychological level)

Support:

- $115,000 (previous low)

- $108,000 - $110,000 (key support range)

- $100,000 (psychological level)

A break above $125,000 could open the door for a retest of the all-time high, while a break below $108,000 could trigger a significant correction.

Technical Indicator Analysis

Let's delve deeper into the signals from key technical indicators:

1. Moving Averages: The 50-day and 200-day moving averages are still trending upwards, indicating that the long-term trend remains bullish. However, the price is currently trading below the 50-day moving average, which could be a sign of short-term weakness. A break below the 200-day moving average would be a more significant bearish signal.

2. Relative Strength Index (RSI): As mentioned earlier, the RSI is showing a bearish divergence on the daily chart, indicating weakening momentum. The RSI is currently hovering around the 50 level, which is a neutral reading. However, if the RSI breaks below 50, it could signal a further decline in price.

3. MACD (Moving Average Convergence Divergence): The MACD is trending downwards and a bearish crossover appears increasingly likely. This further reinforces the bearish divergence observed with the RSI, adding weight to the argument that a correction is on the horizon.

4. Trading Volume: Trading volume has been declining in recent days, which is a concerning sign. Decreasing volume suggests a lack of conviction among buyers and sellers, and it could make Bitcoin more vulnerable to sudden price swings.

5. Fibonacci Retracement Levels: Using Fibonacci retracement levels on the recent swing high ($125,000) and swing low ($108,000) shows that the 38.2% retracement level is around $115,000, which has acted as a support level recently. A break below this level could lead to a test of the 50% retracement level around $116,500.

Current Market Sentiment

The current market sentiment surrounding Bitcoin is mixed. While some analysts remain bullish, citing the long-term potential of the cryptocurrency and the expectation of interest rate cuts, others are becoming increasingly cautious due to the negative technical indicators and decreasing on-chain activity. News regarding regulatory developments and potential competition from other cryptocurrencies are also weighing on market sentiment. The market is in a state of uncertainty, and traders are waiting for further clarity before making any major moves.

Potential Trading Strategies

Based on the current technical and fundamental outlook, traders might be considering the following strategies:

1. Conservative Traders: May choose to remain on the sidelines, waiting for a clearer trend to emerge before entering the market. They may look for a break above $125,000 or a break below $108,000 as confirmation of a new trend.

2. Aggressive Traders: May consider shorting Bitcoin, targeting the $108,000 - $110,000 support range. They may place their stop-loss orders above $125,000 to limit their potential losses.

3. Long-Term Investors: May view the current pullback as a buying opportunity, but they should be prepared for further volatility in the short term. They may consider dollar-cost averaging into Bitcoin over time, rather than making a large lump-sum investment.

Short-Term Price Analysis

In the short term, Bitcoin is likely to remain range-bound between $115,000 and $125,000. A break below $115,000 could trigger a further sell-off towards the $108,000 - $110,000 support range. Conversely, a break above $125,000 could lead to a retest of the all-time high. However, given the negative technical indicators, a breakdown seems more likely than a breakout.

Bullish Scenario: A break above $125,000 could lead to a rally towards $130,000 and potentially a retest of the all-time high. However, this scenario seems less likely given the bearish divergence and decreasing on-chain activity.

Bearish Scenario: A break below $115,000 could trigger a sell-off towards $108,000 - $110,000. A break below this level could lead to a more significant correction towards $100,000.

Relevant YouTube Videos

Here are two relevant and recent YouTube videos that offer price analysis for Bitcoin:

Video 1: Data Analyst on How to Turn Business Metrics to Insights
Video 1 Source

Video 2: Simple Strategies for Turning Data into Insights
Video 2 Source

Conclusion

While the expectation of interest rate cuts has created a generally positive outlook for Bitcoin, the emergence of a bearish divergence on the daily chart and the decrease in on-chain activity are two worrying signs that could temper its bullish momentum. Traders and investors should carefully consider these factors and exercise caution in the coming days. The cryptocurrency market is inherently volatile and risky, and it is essential to conduct independent research and use appropriate risk management strategies. Always remember that past performance is not indicative of future results, and you should only invest what you can afford to lose.