After testing support at the $30,000 level on July 20, 2021 (Hong Kong time), Bitcoin entered a steady upward trend over the following two weeks. According to data from OKX, Bitcoin has stabilized around $43,000 at the time of writing—closing above the 120-day moving average for two consecutive days. This development has reignited market speculation: Is this a short-lived bounce or the beginning of a new bullish phase?
The 120-day moving average is widely regarded in technical analysis as a key indicator separating bull and bear markets in the cryptocurrency space. Historically, its significance cannot be overstated.
In early September 2020, Bitcoin first approached this critical level and found support over six consecutive days. That event marked the start of a seven-month rally that propelled the price from approximately $10,000 to an all-time high of $64,800. Conversely, in May 2021, after failing to sustain momentum above $60,000, Bitcoin dropped sharply and officially broke below the 120-day MA on May 16. It then traded beneath this threshold for nearly three months—a period marked by widespread market pessimism.
Now, with Bitcoin once again reclaiming the 120-day MA as of August 6, 2025, we’re witnessing what could be a pivotal moment. Beyond just monitoring this technical level, it's crucial to examine underlying market dynamics such as investor sentiment, on-chain activity, institutional involvement, and exchange flows to better understand whether this move signals lasting strength.
👉 Discover how market trends are shaping Bitcoin’s next move—explore real-time data insights here.
Understanding the Broader Crypto Market Landscape
To assess Bitcoin’s trajectory accurately, we must look beyond price charts and analyze macro-level indicators within the broader digital asset ecosystem.
Total Market Capitalization Recovery
As of August 9, total crypto market capitalization surpassed $1.8 trillion, recovering 70.58% of its peak value earlier in the year. While Bitcoin currently trades at about 66.3% of its April high, the fact that the overall market has outperformed on a recovery basis suggests growing diversification. Investors are increasingly allocating capital to alternative cryptocurrencies, indicating maturation and expanding interest across the sector.
Bitcoin Dominance Stabilizes
Bitcoin’s dominance currently stands at 45.77%, up from a low of 38.13% in May—an increase of roughly 20%. However, this rise lags behind Bitcoin’s own price appreciation during the same period. Despite not regaining previous dominance highs (which once exceeded 70%), Bitcoin remains the cornerstone of the crypto market. A stable yet slightly declining dominance may reflect healthy ecosystem growth, where innovation in DeFi, NFTs, and Layer-1 platforms attracts capital without undermining BTC’s foundational role.
Exchange Reserves Continue to Decline
One of the most telling signs of long-term confidence is the movement of Bitcoin off centralized exchanges (CEXs). Data from Glassnode shows that since June 16, CEX wallets have seen consistent net outflows. From July 28 to August 8 alone, daily net outflows averaged over 60,000 BTC—with a peak of 108,000 BTC on July 30.
This trend is further confirmed by CEX Bitcoin reserves, which dropped from a high of 2.61 million BTC on June 1 to approximately 2.49 million BTC by August 8. When investors move BTC off exchanges into private wallets, it often signals a shift toward holding rather than selling—commonly interpreted as bullish behavior.
👉 See how smart money moves—track real-time exchange flows and wallet activity now.
On-Chain Activity and Institutional Signals
While price and market cap offer a top-down view, deeper insights emerge from analyzing blockchain data and institutional behavior.
Surge in On-Chain Transaction Volume
According to OKLink, Bitcoin’s daily on-chain transaction volume has surged in recent weeks. On August 1 and 2, volumes reached $1.17 trillion and $1.42 trillion respectively—far exceeding July’s previous high of $547 billion and approaching year-to-date peaks. This spike coincides closely with the price reclaiming the 120-day MA.
However, transaction count has only risen modestly compared to volume growth. This discrepancy suggests that larger transactions—likely from whales or institutions—are driving the rally rather than widespread retail participation.
Growth in Mid-Tier Holder Addresses
Further evidence comes from addresses holding between 1 and 100 BTC—a segment often viewed as "smart money" or serious long-term investors. Both subgroups—those holding 1–10 BTC and 10–100 BTC—have seen notable increases recently. Rising adoption among these holders reinforces the idea that confidence is returning among experienced participants who typically avoid short-term speculation.
Institutional Sentiment: GBTC and Ark Invest
Institutional signals remain mixed but increasingly positive.
Grayscale’s GBTC trust continues to hold around 650,000 BTC. However, Grayscale hasn’t added new BTC since February, and GBTC has traded at a persistent discount (negative premium) in secondary markets—reaching as low as -21.23%. A negative premium means investors can buy shares cheaper on exchanges than through direct creation, often reflecting weak demand or regulatory uncertainty.
That said, the discount has narrowed significantly—from over -20% to just -7.53% by August 8—suggesting renewed institutional appetite and improving market sentiment.
Additionally, Ark Invest purchased over one million shares of GBTC on June 22. Given Ark’s history of forward-thinking investment strategies and Cathie Wood’s vocal support for crypto assets, this move serves as a strong vote of confidence in Bitcoin’s long-term potential.
Frequently Asked Questions
Q: What does it mean when Bitcoin closes above the 120-day moving average?
A: Closing above the 120-day MA is often interpreted as a shift from bearish to neutral or potentially bullish momentum. It suggests increasing buying pressure and may indicate that long-term investors are regaining control.
Q: Why are exchange outflows considered bullish?
A: When Bitcoin leaves centralized exchanges, it typically goes into cold storage or self-custody wallets. This reduces available supply for immediate sale and reflects a “hold” mentality—commonly associated with confidence in future price appreciation.
Q: Does rising transaction volume always mean higher prices?
A: Not necessarily. High volume confirms interest and liquidity but must be analyzed alongside context—such as whether transactions are incoming to exchanges (bearish) or outgoing (bullish), and whether they involve large or small entities.
Q: Is GBTC’s narrowing discount a reliable bullish signal?
A: Yes, a shrinking discount indicates growing demand for GBTC shares relative to their net asset value. It reflects improved investor sentiment and could precede larger institutional inflows if regulatory clarity improves.
Q: How important are mid-tier holders (1–100 BTC)?
A: These addresses represent committed investors with meaningful capital but not so much as to suggest exchange or miner activity. Their growth often foreshadows broader market accumulation phases.
Q: Can we expect another major rally like in 2020–2021?
A: While past performance doesn’t guarantee future results, similar patterns—such as sustained exchange outflows, rising on-chain volume, and institutional re-engagement—are re-emerging. If these trends continue, a substantial upward move is plausible.
👉 Stay ahead with real-time analytics—monitor key metrics shaping the next bull run here.
Final Thoughts: Risk Management Over Prediction
“History doesn’t repeat itself, but it often rhymes.” As Bitcoin returns to the pivotal 120-day moving average after months of consolidation, traders may be eager for confirmation of a new uptrend. But rather than seeking certainty in volatile markets, successful investors focus on process over prediction.
Technical indicators provide guidance; on-chain data offers transparency; institutional moves lend credibility. Yet none guarantee outcomes in an asset class still shaped by sentiment, regulation, and macroeconomic forces.
What matters most is maintaining discipline—defining entry and exit points, managing position sizes, and respecting stop-loss levels. Whether this proves to be a reversal or merely a relief rally, preserving capital ensures you remain in the game long enough to benefit when the next major move unfolds.
Core Keywords:
Bitcoin price prediction, 120-day moving average, crypto market trends, on-chain analysis, institutional adoption, exchange outflows, Bitcoin dominance