Bitcoin Nears $116,000 Amid Low Sell Pressure and Institutional Demand, but RSI Signals Caution

• Bitcoin price has surged past $116,000, setting a new all-time high and signaling strong institutional interest amid historically low sell pressure.

• Exchange inflows have dropped to their lowest levels since 2015, indicating that holders are reluctant to sell despite the price rally.

• COINOTAG reports highlight that while Fibonacci extensions suggest further upside, the RSI divergence advises caution for traders eyeing a sustained breakout.

Bitcoin hits $116K with record low exchange inflows; institutional demand and Fibonacci targets suggest upside, but RSI divergence calls for cautious optimism.

Exchange Inflows Drop; Where’s the Selling?

Bitcoin’s recent price surge above $116,000 comes alongside a remarkable decline in exchange inflows, which have fallen to just 3,200 BTC per day—the lowest since 2015. This contrasts sharply with December 2024, when inflows peaked near 97,000 BTC amid the $100,000 breakout. Such a steep reduction in coins moving to exchanges signals a significant drop in selling pressure, reflecting strong holder confidence in the asset’s near-term prospects.

Exchange inflows serve as a critical indicator of market sentiment, as coins sent to exchanges typically precede selling activity. The current low inflow rate suggests that both retail and institutional holders are opting to retain their Bitcoin, reducing the likelihood of a sudden price drop similar to May’s correction. Alexander Zahnd, interim CEO of Ziliqa, emphasized this momentum in a recent interview, noting robust institutional demand and continued corporate accumulation as key drivers behind the rally.

Wallet Clusters Offer Support to the Bitcoin Price

Support for Bitcoin’s price is further reinforced by wallet cluster analysis from IntoTheBlock’s In/Out of Money Around Price (IOMAP) metric. Over 645,000 addresses hold approximately 476,650 BTC purchased between $108,795 and $110,624, creating a substantial demand wall near current price levels. This cluster acts as a buffer zone, where buyers are likely to defend their positions, preventing rapid declines.

In contrast to May’s swift breakdown of support zones, the presence of this large cluster suggests that short-term buyers remain profitable and committed. The IOMAP tool’s ability to identify these critical support and resistance zones provides traders with valuable insights into potential price stability and areas where buying interest may intensify.

RSI Divergence Says “Caution,” But Still No Panic

Despite the bullish price action, the Relative Strength Index (RSI) reveals a bearish divergence, with BTC making higher highs while RSI forms lower highs. This classic technical signal often precedes price corrections, indicating waning momentum. However, unlike May’s peak RSI near 80, the current RSI remains below 72, suggesting that the market is not yet overextended.

The divergence signals traders to exercise caution and anticipate potential retracements, but it does not imply an imminent crash. Momentum indicators like RSI track the strength of price moves, and the current readings imply that the upward trend may still have room to run before exhaustion sets in.

Trend-Based Fibonacci Levels Offer Clear Upside Targets

With Bitcoin in price discovery territory, trend-based Fibonacci extensions provide a roadmap for potential resistance levels. Using the swing low of $74,543, the May high of $111,980, and the retracement to $98,000, key Fibonacci targets have been identified:

• 0.382 at $112,439
• 0.5 at $116,857
• 0.618 at $121,274
• 1.0 at $135,576

Bitcoin’s recent wick near $116,500 aligns closely with the 0.5 Fibonacci extension, suggesting that surpassing this level could pave the way toward $121,000 and potentially $135,000. These levels serve as critical guideposts for traders and investors monitoring the sustainability of the rally, contingent on continued momentum and institutional support.

Overall, Bitcoin’s price action is underpinned by reduced sell pressure, strong institutional accumulation, and solid support clusters. However, the emerging RSI divergence and key support levels near $109,632 warrant vigilance to avoid a repeat of May’s retracement.

Conclusion

Bitcoin’s breakout above $116,000 marks a significant milestone fueled by institutional demand and historically low exchange inflows, signaling strong holder conviction. Supportive wallet clusters and Fibonacci targets outline a clear path for further gains, but the presence of RSI divergence advises measured caution. Investors should watch key support levels closely to confirm whether this rally can transition into a sustained uptrend or if a corrective phase looms. Staying informed and responsive to on-chain and technical indicators remains essential in navigating Bitcoin’s evolving landscape.