Bitcoin News Today: Bitcoin RSI Bearish Divergence and CME Gap Signal 20% Potential Price Drop as Short-Term Downturn Looms

Bitcoin's recent price action has raised concerns about waning bullish momentum, with technical indicators and market dynamics pointing to potential short-term downside risks. A hidden bearish divergence between Bitcoin's price and its 14-period RSI has emerged, signaling weakening upward momentum. This pattern, observed when price makes higher highs while RSI fails to follow suit, historically precedes corrective declines. A similar divergence in March 2024 preceded a 20% price drop, suggesting a similar retracement could unfold as Bitcoin consolidates near $115,000–$120,000 [1].

A critical CME gap between $114,380 and $115,635 further amplifies bearish expectations. Historical data shows Bitcoin frequently "fills" such gaps, with seven out of nine gaps in 2025 already closed. The remaining void represents a strong magnet for price action, increasing the likelihood of a short-term dip toward $115K to close this range [2]. This aligns with broader market cyclicality, as the Index Bitcoin Cycle Indicator (IBCI) has entered a distribution zone—a period historically associated with interim tops and profit-taking. While the IBCI has not reached the 100% euphoria level seen in past cycles, metrics like Puell Multiple and STH-SOPR remain below mid-levels, suggesting retail speculation and miner activity have yet to peak [3].

On-chain data reveals mixed signals. Long-term holders (LTHs) have begun distributing their holdings, with the CDD ratio hitting historic lows, indicating reduced selling pressure from large investors [4]. However, retail holders remain hesitant to offload positions, maintaining liquidity within the $115K–$120K range. This dynamic creates fragility, as evidenced by a sharp 2% drop to $117,634 on July 24 amid stalled ETF inflows and bearish options activity [5]. Analysts remain divided: some view the consolidation as a healthy correction ahead of a potential $135K breakout, while others warn a break below $115K could trigger further consolidation toward $110,530. A decisive move above $122K with strong volume would be needed to validate the bullish case [6].

Macro factors add to uncertainty. A recent trade deal-driven surge in the Dow Jones to 400 points has heightened market volatility, with Bitcoin's price closely tracking equity trends. Bearish sentiment intensified following a 2% intraday decline on July 24, as sellers accumulated near $118K and on-chain metrics showed reduced institutional buying pressure [7]. While the long-term bull trend remains intact, short-term risks loom large, with key support levels between $115K–$118K expected to be heavily tested in the coming weeks.

Source:

[1] [Bitcoin News Today: BTC consolidation near $115K-$120K signals $135K surge](https://www.ainvest.com/news/bitcoin-news-today-btc-consolidation-115k-120k-signals-135k-surge-2507/)

[2] [Bitcoin Eyes $115K dip as seller exhaustion builds near 118K zone](https://www.binance.com/en/square/post/07-23-2025-bitcoin-price-news-bitcoin-eyes-115k-dip-as-seller-exhaustion-builds-near-118k-zone-27335236213818)

[3] [Bitcoin LTHs Start Distributing: CDD Ratio Hits Historic Low](https://www.mitrade.com/insights/news/live-news/article-3-985358-20250725)

[4] [Bitcoin Holders Still Reluctant To Sell – Supply Active Data](https://www.mitrade.com/insights/news/live-news/article-3-981284-20250724)

[5] [Bitcoin Falls to $117K as ETF Inflows Stall, Trump Trade Deal](https://www.tradingnews.com/news/bitcoin-price-slides-below-118k-usd)

[6] [Ideas and Forecasts on Cryptocurrencies](https://in.tradingview.com/markets/cryptocurrencies/ideas/)

[7] [Bitcoin Consolidation at $115K-$120K May End as Technicals Target $135K-$150K](https://www.ainvest.com/news/bitcoin-news-today-bitcoin-consolidation-115k-120k-technicals-target-135k-150k-2507/)

[8] [Dow Jones Rises 400 Points After Trade Deal](https://m.economictimes.com/crypto-news-today-live-23-jul-2025/liveblog/122843856.cms)