According to market analysis company Swissblock, Bitcoin's latest price surge to $120,000 has failed and now resembles a 'failed breakout zone.' In a post dated July 31, the company stated that 'momentum has not been sparked,' arguing that the actual profit flow and a large amount of coins in profit have turned every price increase into an opportunity for supply to meet the price.
Profit-Taking Activity Cooling Bitcoin's Rally
Swissblock views this decline as a pause rather than a collapse. 'Profit-taking activity is increasing—but not as sharply as at the end of 2024,' the company wrote, adding that the impact until the end of July 'is sufficient to curb the rally and trigger consolidation.' The tone is cooling down, not capitulating: 'Selling pressure is evident, but not excessive—think of it as cooling off, not capitulation.' This diagnosis is based on on-chain actual profit data—an input factor that tends to expand into price surges when long-held coins are spent to increase price—and a market structure in which buy orders are absorbing supply rather than being overwhelmed by it.
The most notable data point in the article is the profit range: '96% of the supply is in profit,' Swissblock notes, citing Glassnode. This ratio historically corresponds to end-of-cycle euphoria, but mechanically, it also self-limits; when nearly all holders are in profit, latent selling pressure increases because 'unrealized profits are enticing sellers.' As Swissblock stated, 'Strong holders are still there. But unrealized profits are enticing sellers. Until demand returns, each rally attracts supply.' The company believes the overall trend 'remains intact—but momentum needs to be reset.'
In addition to actual on-chain cash flows, the company's aggregated fundamental factors show a neutral stance with improving liquidity. Swissblock wrote: 'The fundamentals of BTC are very strong and stable,' pointing out that the Bitcoin Fundamental Index is 60 (neutral), 'Network Growth is cooling off,' and 'Liquidity is recovering.' This combination typically favors range-bound behavior rather than directional price surges—'a supportive consolidation environment,' as the post stated—in which Bitcoin 'can continue to move sideways longer—until it is ready to break out with strong conviction.' This implies that the risk of a 'failed breakout' in the market reflects timing rather than a trend reversal: positioning and liquidity are still not synchronized to sustain further.
The inter-asset context has similar nuances. Swissblock wrote: 'The altcoin season is lively—but under pressure,' noting that although '$ETH continues to outperform BTC structurally, holding up better in this correction,' most altcoins are weakening, with 'only 5% in the top 100 showing positive growth momentum.' This weakening emphasizes the selectivity of risk appetite and the fragility of momentum outside of the largest names. Historically, this pattern often precedes a decisive move by Bitcoin, either increasing or breaking the decline.
Swissblock's final assessment leans cautiously positive. 'Profit-taking is gradually decreasing, and selling pressure is being absorbed. BTC is preparing to break out—but momentum needs to be adjusted.' Until that adjustment occurs, the company expects a strong price rally: buy orders continue to meet supply from profitable holders, actual profits are moderate, and liquidity is improving. Swissblock argues that if and when Bitcoin brings momentum back to positive levels, the ripple effect could be very powerful: 'While BTC is moving sideways, pay attention to the moment it breaks out—ETH and other altcoins are likely to explode in price when that happens.'
In summary, the drop to $115,000 today looks like a test of profit absorption and a reset of market momentum without completely undermining the broader uptrend as a total rejection. With 96% of profit supply and narrowed breadth, the next momentum may depend on whether liquidity and demand can reassert themselves before profit-taking accelerates again. Currently, Swissblock's message is clear: a breakout needs to be created, not assumed.