Bitcoin (BTC-USD) Price Stalls Near $120K as ETF Flows and Crypto Legislation Shape Outlook

Bitcoin (BTC-USD) Price Faces Heavy Resistance at $120K Amid Legislative Shifts and Derivatives Frenzy

BTC-USD Consolidates Just Below All-Time High of $123,218

After reaching a historic peak of $123,218 last week, Bitcoin (BTC-USD) entered a tight consolidation range between $116,000 and $120,000, currently trading near $118,500. Bulls attempted to retest the upper band on Sunday night, with BTC briefly hitting $119,600 before pulling back. The range-bound structure is being reinforced by technicals: RSI on the daily chart stands at 66, MACD is on the verge of a bearish crossover, and the 50-day EMA hovers near $110,325, offering strong dynamic support below.

The hourly BTC/USD chart indicates a recovery bounce from $116,551 toward $119,500, and continuation patterns suggest any break above $120,000 with volume could initiate a leg higher toward the previous high or beyond. Conversely, a breach of $116,000 risks extending downside to the 50-day EMA.

Legislation Sparks Regulatory Optimism, Yet Market Proceeds with Caution

President Trump’s signature on the GENIUS Act has transformed the crypto regulatory landscape. The bill mandates that stablecoin issuers must hold full USD or Treasury reserves, effectively placing them in the realm of quasi money market funds. Deutsche Bank estimates that such reserves could surpass $1 trillion by 2028, with Tether already holding over $120 billion in Treasuries as of Q1 2025.

The act explicitly bans stablecoin yield offerings and reaffirms the dollar's reserve status, potentially reinforcing capital flows into the U.S. short-term bond market. Trump declared the law a "giant step to cement American dominance of global finance," while also banning the development of CBDCs under executive oversight.

Further policy clarity is imminent. The White House is set to publish its first virtual asset policy report Tuesday, a product of EO 14178. Market participants are watching closely for signals on how the U.S. will shape strategic Bitcoin reserves, digital asset oversight, and integration into fiscal planning. Trump's AI and crypto czar David Sacks and key figures like SEC acting chair Mark Uyeda are leading the initiative.

Bitcoin ETFs Post $2.39B Weekly Inflow, Marking Sixth Consecutive Week of Institutional Support

Spot Bitcoin ETFs in the U.S. attracted $2.39 billion in net inflows last week, sustaining a six-week streak of bullish institutional flows. This influx is being interpreted as a confirmation of institutional conviction, despite short-term price hesitation. SoSoValue data shows cumulative net inflows rising steadily, contributing to market floor stability near $116,000.

The inflows coincide with a broader legislative alignment around crypto regulation in the U.S. Aside from the GENIUS Act, two other House-passed bills—the CLARITY Act and Anti-CBDC Surveillance State Act—seek to classify token jurisdiction and limit Fed powers, respectively. While their Senate fate remains uncertain, market sentiment reflects a perception of political alignment on pro-crypto policy.

Derivatives Market Heating Up: Open Interest at $42B, Funding Rates Flash Greed

Data from CryptoQuant shows Bitcoin open interest sitting near $42 billion, with recent peaks approaching $43 billion. This figure reflects a massive build-up in leveraged long exposure, underscoring aggressive positioning into resistance.

Funding rates across exchanges continue to climb, further confirming long-bias dominance. CryptoQuant cautions that the market is in "greed mode," with positioning lopsidedly bullish. Elevated funding + high open interest = a classic volatility trap. Should BTC fail to decisively clear $120K, a liquidation cascade could follow.

This echoes the weekend’s $400 million in liquidations, of which $221 million were short positions. The market is primed for movement; the direction will hinge on macro catalysts like ETF inflow continuity, Tuesday's policy report, and potential short-squeeze triggers.

Strategy Buys 6,220 BTC, Total Holdings Now 607,770 BTC at $43.61B Valuation

Strategy, the largest public Bitcoin holder, added 6,220 BTC worth $739.8 million between July 14–20, paying an average of $118,940 per BTC. The purchase, disclosed in a Form 8-K, was funded via at-the-market equity issuance and preferred shares.

Strategy now holds 607,770 BTC, acquired at an average cost of $71,756, representing unrealized gains of over $28 billion at current levels. This aggressive treasury strategy aligns with Trump's broader narrative on digital asset reserves and national competitiveness.

BTC-USD Technical Overview: Volume, Oscillators, and Moving Averages

All major moving averages remain aligned bullishly: the 10-day EMA stands at $117,380, and the 200-day SMA sits far below at $97,962, reinforcing trend support. Oscillators are neutral-to-bullish: RSI at 66, ADX at 28, and MACD positive at 3,019. Volume remains the missing piece for breakout conviction.

Short-term traders are watching the $118,000 to $118,500 range for low-risk entries, while $116,000 marks the technical stop-loss threshold. Confirmation above $120,000, particularly with volume spikes, would unlock paths toward $123,000, $127,000, and potentially $130,000.

Altcoin Rotation Weakens BTC Dominance to 58% as Meme Tokens Rally

While Bitcoin stabilizes, capital is rotating aggressively into altcoins. BTC's market dominance slipped from 63% to 58% over the past week. Top movers include:

• Pudgy Penguins (PENGU): +25% in 24h

• TRUMP Coin: +11.4%

• Dogecoin (DOGE): +11.02%

• Solana (SOL): +7.42% to $195.88

• Ethereum (ETH): +0.83% to $3,824.66

• XRP: +2.52% to $3.61

ETH strength is being linked to diminished yield appeal of stablecoins under the GENIUS Act. Investors seeking staking income may be pivoting toward Ethereum. If this capital rotation continues, BTC could underperform even if the price holds its current range.

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