After a months-long surge that brought Bitcoin close to its all-time high, signs are emerging that the current Bitcoin price rally might be losing momentum. Trading just below $119,000, BTC has entered a phase of consolidation, prompting analysts to question whether August could mark the beginning of a correction.
A growing number of on-chain indicators and macro shifts suggest that a turning point may be near—especially as the liquidity inflow supporting recent gains appears to be drying up. Let’s examine the data behind this cautious sentiment.
MVRV Ratio Signals Potential Cycle Peak
The Market Value to Realized Value (MVRV) ratio, a key metric used to identify market tops and bottoms, is currently hovering around 2.34 on the 1D timeframe—dangerously close to past local tops. According to analysts at CryptoQuant, levels above 2.5 often indicate overheated conditions, with sharp corrections historically following shortly after.
Source: CryptoQuant
Notably, the same MVRV setup preceded the peaks in early 2021 and Q4 2021, suggesting that this summer’s rally could soon enter a riskier phase. One expert noted that “late August or early September may act as the inflection point,” especially if the current upward trend continues without renewed accumulation.
“We’re seeing a textbook MVRV cycle behavior,” one CryptoQuant analyst wrote. “The difference this time is the macro environment—liquidity is more fragile.”
Stablecoin Supply Ratio (SSR) Is on the Rise
Another worrying sign is coming from the Stablecoin Supply Ratio (SSR), which has been quietly climbing over the past two weeks. The SSR measures the ratio between Bitcoin’s market cap and the total stablecoin supply. A higher SSR indicates that fewer stablecoins are available to purchase BTC, reducing potential buying pressure.
Source: CryptoQuant
This metric had dropped significantly between March and May, supporting Bitcoin’s rally to $115K+. However, the recent SSR rise—while price remains stagnant—suggests a growing divergence between liquidity and momentum.
This decoupling may lead to a short-term imbalance, with fewer fresh inflows to sustain higher price levels. That could make BTC more vulnerable to negative macro headlines or profit-taking.
Price Action Shows Slowing Momentum
From a technical standpoint, the Bitcoin price chart is forming a plateau pattern. After reaching $119,000 earlier this month, BTC has failed to break above key resistance levels near $120,000. This horizontal price action, paired with decreasing volume, is often a precursor to a volatility spike—either up or down.
Source: Tradingview
Some analysts interpret this as a bull flag, but others believe the market may be running out of steam. With no new ETF announcements or major bullish catalysts expected in the next few weeks, the market may lack the fuel needed for another leg up.
Will August Bring a Bitcoin Pullback?
Multiple on-chain analysts are now flagging August as a likely turning point. While no single metric guarantees a price drop, the combination of a high MVRV ratio, rising SSR, and stagnant price action paints a cautious picture.
Liquidity conditions are also evolving. According to CryptoQuant, “recent Bitcoin price increases were partially supported by decreasing stablecoin balances being deployed,” but this dry powder may soon run out. If so, bulls may find themselves with little support beneath the current levels.
Final Thoughts: Bitcoin Price Risks Mount Ahead of August
The Bitcoin price remains resilient, but cracks are forming beneath the surface. With technical momentum slowing and on-chain indicators flashing yellow, August could be a make-or-break month for BTC.
A healthy correction may be needed to reset funding rates and allow for new accumulation. Conversely, a failure to hold current levels could spark a steeper drop toward $105,000–$110,000.
For now, all eyes are on on-chain data, liquidity flows, and macro developments. Traders should brace for volatility and remain cautious heading into late summer.
