Bitcoin fell back after reaching $122,000! US CPI data is about to be released, on-chain indicators show a recovery in long-term holder confidence | BTC price prediction

Bitcoin experienced significant fluctuations this week, briefly peaking at $122,000 monthly high before quickly retreating to the current price of $119,117. The market is focused on the upcoming U.S. CPI data (expected year-on-year 2.8%), the results of which will significantly influence the short-term direction. Positive signals are emerging: after the historic dumping in July, the profit-taking speed of long-term holders (LTH) has significantly slowed down, the number of new addresses surged 15% over the last 10 days, and the number of active addresses reached 367,349 (a 9-month high). If the CPI remains below expectations at 2.7%, Bitcoin may break the $120,000 resistance aiming for the previous high; if it exceeds expectations, it may continue to fluctuate due to the 0.76 correlation with Bit.

[Price Shock: 122,000 High Point Faces Resistance, Waiting for CPI to Determine Direction] Bitcoin has shown significant fluctuation this week:

• High Stage: The price skyrocketed to 122,000 USD in the past 48 hours, reaching a monthly high.
• Rapid Drop: After encountering strong selling pressure, it quickly fell back, currently reported at 119,117 USD.
• Key Resistance: The current price is facing strong resistance below $120,000, which has recently suppressed upward movement. Investors are closely watching the upcoming U.S. Consumer Price Index (CPI) report, as its results will be a key catalyst for short-term bullish and bearish speculation.

[On-chain Dawn: Long-term holders' selling pressure eases, new funds quietly enter the market]

(Profit realized by Bitcoin based on coin age | Source: Glassnode) August on-chain data releases positive signals:

1. Long-Term Holders (LTH) Selling Slows Down: The 7-day moving average (SMA) shows that after experiencing one of the largest profit realizations in Bitcoin's history in July (with an average daily of over $1 billion), the profit-taking activity of long-term holders significantly decreased in August. This indicates that after the dumping, the confidence of long-term investors is recovering.

2. Surge in New Addresses: In the past 10 days, the number of new Bitcoin addresses has increased by 15%.

   

   (Source: Glassnode)

3. Surge in Activity: The number of active addresses has risen to 367,349, reaching a 9-month peak. These indicators collectively suggest that Bitcoin is attracting new investors to enter the market, with on-chain activity recovering, providing support for market sentiment.

【CPI Impact Analysis: Two Scenarios Under High Correlation】 Historically, Bitcoin has often been viewed as an inflation hedge, and theoretically, a high CPI (which raises interest rate expectations) could benefit its performance. However, the current high correlation between Bitcoin and the US stock market (with a Pearson coefficient of 0.76) has changed the traditional logic. Referring to the market performance from April to May, BTC's trend is highly linked to the stock market:

• Scenario 1 (CPI higher than expected ≥2.8%): If the year-on-year increase in CPI exceeds expectations, it may strengthen the Federal Reserve's hawkish stance, suppressing risk assets. Due to the high correlation between stocks and coins, Bitcoin may struggle to break through the $120,000 resistance, maintaining a fluctuating pattern.
• Scenario 2 (CPI meets or is lower than expected ≤2.7%): If the CPI remains at the 2.7% level or lower as in July, it will alleviate concerns about policy tightening and be favorable for risk appetite. Bitcoin is expected to strongly break through the resistance level of 120,000 dollars, and then challenge the 122,000 dollars mark, potentially launching an attack towards the historical high (ATH) of 123,218 dollars.

[Analyst Warning: Historical Experience May No Longer Be Valid] Famous crypto analyst Michael Van De Poppe pointed out to BeInCrypto:

• “I believe that applying historical data in 2025 is no longer appropriate. For example, the traditional 'sell in May and go away' strategy, whereas in reality, the market has seen an extremely strong breakout since May.”
• This viewpoint emphasizes that in the current complex macro environment (such as the escalation of trade friction), relying on historical patterns to predict risks is increasing and there is a need to pay more attention to real-time data and structural changes.

【Conclusion: CPI Becomes a Short-term Deciding Factor, On-chain Recovery Lays the Foundation for the Medium-term】 Bitcoin quickly fell back after hitting $122,000, highlighting the cautious sentiment in the market ahead of key resistance levels. The upcoming US CPI data will serve as a catalyst to break the deadlock, with its high correlation (0.76) with US stocks indicating that the data outcome will indirectly influence coin prices by affecting overall risk appetite. A CPI below expectations could help Bitcoin break through the $120,000 resistance and regain upward momentum; a CPI above expectations may prolong the volatility. The positive aspect is that on-chain data has shown encouraging changes: the selling by long-term holders has significantly slowed down, new users continue to enter the market, and activity has reached a nine-month high, laying a more solid foundation for Bitcoin's mid to long-term trend. Regardless of the CPI outcome, these positive on-chain signals are worth investors' close attention.