Bitcoin May Be Nearing a Cycle High, Indicator Shows, Even as Investor Flows Stay Supportive

Bitcoin’s long-term momentum indicator is flashing a warning even as institutional flows signal confidence in a strong year-end rally.

The 14-month Relative Strength Index (RSI) is showing a bearish divergence — prices set new highs in July–August, but the RSI turned lower, suggesting weakening market momentum. The signal comes as BTC meets resistance at a trendline drawn from the December 2017 and November 2021 peaks.

Despite this, options activity shows traders positioning for further gains. “Blocks suggest traders are gearing up for further upside, with December BTC call spreads ($125K/$160K) active. Ethereum saw demand at $4,800 for September,” said Jake Ostrovskis, OTC trader at Wintermute.

Block flows, typically executed by institutions off-exchange, indicate expectations of BTC rallying as high as $190,000 by year-end. At press time, Bitcoin traded near $110,500, down 4.6% in August, CoinDesk data shows.