RSI Tightens as Profit-Taking Limits Upside

In Brief

• Bitcoin’s RSI remains below resistance, signaling weak momentum and potential volatility.
• Realized profits stay high above $1.6B, limiting upside as sellers continue to exit positions.
• $2.7B ETF inflows contrast with $19B in shorts, setting stage for possible short squeeze.

Bitcoin is trading near $110,413, with pressure building from both technical resistance and elevated profit-taking levels. The weekly RSI continues to trend downward, holding near the 45–50 range, signaling limited momentum.

Despite recent price stabilisation, the RSI failed to break its descending trendline for the third consecutive time. This pattern suggests that bearish momentum remains intact while volatility may rise as compression nears a breakout point.

At the same time, realized profits remain high, with the 7-day moving average still above $1.6 billion. Although the recent peak hit $2.25 billion, current levels still show strong investor selling behaviour.

Such elevated profit-taking has historically signaled cycle tops, limiting further upside potential. For sentiment to shift, realized profits must decline meaningfully and indicate renewed accumulation across the board.

Institutions Buy as Shorts Surge

Institutional demand for Bitcoin remains strong, as U.S. spot Bitcoin ETF flows posted a net gain of $2.71 billion this week. Major contributions came from IBIT and FBTC, while GBTC continued to post minor outflows.

This renewed ETF interest shows confidence is returning, even as shorts have grown aggressively, totaling $19 billion across the market. This large bearish positioning increases the chances of a short squeeze, especially if Bitcoin finds support.

On-chain data also points to rising Bitcoin dominance, suggesting capital rotation toward BTC from altcoins. Analysts believe this could extend the cycle slightly, even if only for a few weeks.

Fractal models still show alignment with previous four-year cycles, with the recent top falling just outside the usual timing window. Meanwhile, proprietary indicators remain consistent with past bull cycle tops and bottoms, though this time deviation raises new questions.