Since July 20, 2021 (Hong Kong Time), when Bitcoin tested the $30,000 support level, it has staged a steady uptrend over the following two weeks. According to OKX platform data, Bitcoin currently trades around $43,000, having closed above its 120-day moving average (120-DMA) for two consecutive days.
Technical Significance of the 120-DMA
In crypto markets, the 120-DMA is widely regarded as the bull/bear demarcation line. Historical patterns reveal:
- First Touch (Sep 4–9, 2020): After consolidating near the 120-DMA for six days, Bitcoin launched a seven-month rally from $10,000 to $64,800.
- Second Touch (May 13–15, 2021): Following failed attempts to breach $60K, prices collapsed below the 120-DMA on May 16, remaining under it for nearly three months.
- Current Scenario (Aug 6–present): This third approach warrants close monitoring—not just for price action but also for underlying market dynamics.
Macro Market Indicators
1. Total Crypto Market Cap
- Current valuation: $1.8 trillion (Coingecko), recovering 70.58% from its 2021 peak.
- Bitcoin’s price sits at 66.3% of its April high, signaling diversification into altcoins.
2. Bitcoin Dominance
- At 45.77% (Bybt), up 20.04% from May’s low of 38.13%.
- Despite altcoin growth, Bitcoin retains market leadership—a bullish structural indicator.
3. Exchange Net Flows
- CEX Outflows: Daily net outflows averaging 60K+ BTC since June 16 (Glassnode), peaking at 108K BTC on July 30.
- Exchange Reserves: Dropped from 2.61M BTC (June 1) to 2.49M BTC (August 8), suggesting accumulation.
On-Chain & Institutional Signals
Key On-Chain Metrics
- Transaction Volume: Spiked to $1.42 trillion on Aug 2 (OKLink)—near yearly highs—aligning with the 120-DMA breakout.
- Transaction Count: Modest increase implies large-volume trades drove the rally.
- Address Growth: Wallets holding 1–100 BTC expanded notably (Glassnode), reflecting retail/professional accumulation.
Institutional Activity
- Tesla’s Holdings: Q2 reports confirmed no Bitcoin sales, with $1.3B in BTC assets (OKX analysis).
GBTC Trends:
- Negative premium narrowed to -7.53% (OKLink), signaling reduced bearish sentiment.
- Ark Invest purchased 1.06M GBTC shares (June 22), hinting at institutional accumulation.
FAQs: Bitcoin’s 120-DMA Breakout
Q1: Is the 120-DMA a reliable trend indicator?
Yes. Historically, sustained closes above it signal bullish phases, while breakdowns precede extended bear markets.
Q2: Why are exchange outflows bullish?
Fewer BTC on exchanges reduces sell pressure, indicating long-term holding intentions.
Q3: What’s the significance of GBTC’s premium recovery?
Shrinking negative premiums suggest improving institutional demand—a potential precursor to price rallies.
👉 Discover Real-Time Bitcoin Metrics on OKX
Conclusion
While history doesn’t repeat identically, its patterns offer invaluable context. Bitcoin’s latest 120-DMA test demands vigilance—not for definitive answers, but for disciplined risk management. Whether this marks a reversal or rebound, traders must prioritize strategic exits/entries over speculative certainty.
Remember: Crypto markets reward patience and adaptability. Stay informed, stay agile, and let data guide your decisions.