Bitcoin’s price has trended downward since clinching a new all-time high at $123,731 on August 14. The leading coin now trades at $115,892, noting a 7% dip in less than a week.
While this pullback has triggered concerns among traders, on-chain data suggests a potential rebound, led by Bitcoin’s largest investors, could be on the horizon.
BTC May Be Entering a New Bullish Phase, Analyst Says
In a new report, pseudonymous CryptoQuant analyst SunflowrQuant noted that “a new bullish phase for BTC may be starting in the near term,” as a key on-chain metric flashes positive signals.
SunflowrQuant assessed BTC’s Exchange Whale Ratio and found that the metric has climbed into a zone historically aligned with local price bottoms.
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BTC’s Exchange Whale Ratio measures how much coins flow into exchanges from the top 10 largest transactions. A rising ratio signals increasing activity from large investors, usually in preparation ahead of major market moves.
“When this ratio rises, it signals that large investors (whales) are becoming more active on exchanges — often interpreted as a sign of preparation before major market moves,” the report explained.
The analyst also observed the historical performance of BTC’s Exchange Whale Ratio and found that the coin enters a bottoming phase whenever the metric rises to test the 0.50 level.
“Looking back over recent years, whenever the Exchange Whale Ratio has tested around the 0.50 level, it has often marked local bottoms in price, followed by periods of consolidation and then upside movement,” the analyst said.
This metric, observed using a seven-day moving average, currently sits at 0.48, nearing the 0.50 mark.
If history aligns, this pattern suggests that the recent decline in BTC’s price may be approaching exhaustion, with the foundation being laid for a new rally.
Bitcoin Liquidation Heatmap Points to $120,000 Price Magnet
Readings from BTC’s liquidation heatmap support this bullish outlook. According to Coinglass data, a concentration of leveraged positions and liquidity sits above the coin’s price near the $120,000 region.
Liquidation heatmaps are visual tools that track clusters of leveraged trading positions (longs and shorts) in the market and highlight the price levels where mass liquidations are likely to occur.
Usually, when capital clusters form above an asset’s market value, they attract short-term bullish momentum as traders look to exploit these liquidity zones.
Therefore, they may attract short-term bullish momentum for BTC as traders look to exploit them.
BTC Risks Drop to $111,000 if Selling Persists
If SunflowrQuant’s outlook proves correct and BTC finds a bottom soon, the coin could rebound toward the $120,000 mark following a consolidation period.
However, if sell-side pressure intensifies in the short term, BTC risks extending its decline to $111,961, a level last seen on August 3.
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