Bitcoin Nears All-Time High as Long-Term Selling Cools — Supply Squeeze Ahead?

Bitcoin (BTC) is closing in on a new all-time high as its strongest investors slow down on their selling activity.

On Monday, the BTC price rose 2.50% to over $122,300, a level just $920 away from its record high established a month ago in July. The cryptocurrency’s rise is part of a broader rebound that has seen its price jump by over 9% in over a week.

Rising inflows to exchange-traded funds (ETFs) and increasing corporate treasury adoption have fueled Bitcoin’s prices in the period.

Another important factor is a reducing profit-taking sentiment among long-term holders (LTH), entities that hold BTC for more than 155 days in a row after acquiring them.

Bitcoin LTH Profit-Taking Cools After July’s Historic Spike

Bitcoin’s realized profit-taking by long-term holders (LTH) has slowed sharply in August, according to Glassnode data.

The 7-day moving average of LTH profit realization fell after spending much of July above $1 billion per day, one of the largest sustained selling periods in the cryptocurrency’s history.

In July, realized profits surged as BTC traded above $123,000, with veteran holders, especially those holding coins for over three years, locking in gains. The selling spike coincided with higher volatility and brief price pullbacks.

In August, profit-taking has declined across most age groups, particularly among the >7-year and 3–5-year cohorts.

The slowdown aligns with Bitcoin’s Holder Retention Rate hovering near 80%, meaning 8 out of 10 addresses that had BTC a month ago are still holding today.

Historically, such elevated retention levels signal strong holder confidence and reduced willingness to sell, limiting supply pressure.

If this combination of lower LTH profit realization and high holder retention persists while ETF inflows remain strong, BTC’s chances of breaking new all-time highs improve significantly.

That is also because these large investors are keeping supply away from active circulation, which, if met with higher demand, could prove bullish for Bitcoin.

BTC Bull Flag Breakout Suggests Rally Over $135,000

Bitcoin has broken out of a bull flag pattern on the daily chart, a move that typically signals the continuation of an existing uptrend.

The breakout occurred near $119,000, with the price now trading above the 20-day ($116,757) and 50-day ($114,084) exponential moving averages, reinforcing short-term bullish momentum.

The flag’s height, measured from the late-July swing low (~$106,000) to the record high near $123,220, suggests a technical upside target around $135,000. The breakout is supported by rising trading volumes and an RSI at 65, indicating strong but not yet overbought conditions.

A daily close above $123,220 would confirm the pattern’s continuation potential, while failure to hold above $119,000 could invalidate the breakout and return BTC to its consolidation range.

What Would Change This View?

At 64.79, Bitcoin’s daily relative strength index (RSI) is nearing its overbought threshold of 70, a move that typically precedes periods of correction or consolidation in the crypto market.

Meanwhile, there exists a bearish divergence between Bitcoin’s price and RSI indicator, with the former making higher highs and the latter making lower highs. It suggests that the upside momentum has been weakening.

Both indicators could limit Bitcoin’s potential of hitting its bull flag target of over $135,000. Instead, the cryptocurrency may revisit the flag’s upper trendline at around the $117,000 area for further breakout confirmation.

That level coincides with Bitcoin’s 20-day exponential moving average (20-day EMA; the purple wave). A drop below the wave could send BTC’s price toward the 50-day EMA (the red wave) at around $114,000.