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Bitcoin fell back after reaching $122,000! US CPI data is about to be released, on-chain indicators show a recovery in long-term holder confidence | BTC price prediction
Bitcoin experienced significant fluctuations this week, briefly peaking at $122,000 monthly high before quickly retreating to the current price of $119,117. The market is focused on the upcoming U.S. CPI data (expected year-on-year 2.8%), the results of which will significantly influence the short-term direction. Positive signals are emerging: after the historic dumping in July, the profit-taking speed of long-term holders (LTH) has significantly slowed down, the number of new addresses surged 15% over the last 10 days, and the number of active addresses reached 367,349 (a 9-month high). If the CPI remains below expectations at 2.7%, Bitcoin may break the $120,000 resistance aiming for the previous high; if it exceeds expectations, it may continue to fluctuate due to the 0.76 correlation with Bit.
[Price Shock: 122,000 High Point Faces Resistance, Waiting for CPI to Determine Direction] Bitcoin has shown significant fluctuation this week:
[On-chain Dawn: Long-term holders' selling pressure eases, new funds quietly enter the market]
(Profit realized by Bitcoin based on coin age | Source: Glassnode) August on-chain data releases positive signals:
Long-Term Holders (LTH) Selling Slows Down: The 7-day moving average (SMA) shows that after experiencing one of the largest profit realizations in Bitcoin's history in July (with an average daily of over $1 billion), the profit-taking activity of long-term holders significantly decreased in August. This indicates that after the dumping, the confidence of long-term investors is recovering.
Surge in New Addresses: In the past 10 days, the number of new Bitcoin addresses has increased by 15%.
(Source: Glassnode)
Surge in Activity: The number of active addresses has risen to 367,349, reaching a 9-month peak. These indicators collectively suggest that Bitcoin is attracting new investors to enter the market, with on-chain activity recovering, providing support for market sentiment.
【CPI Impact Analysis: Two Scenarios Under High Correlation】 Historically, Bitcoin has often been viewed as an inflation hedge, and theoretically, a high CPI (which raises interest rate expectations) could benefit its performance. However, the current high correlation between Bitcoin and the US stock market (with a Pearson coefficient of 0.76) has changed the traditional logic. Referring to the market performance from April to May, BTC's trend is highly linked to the stock market:
[Analyst Warning: Historical Experience May No Longer Be Valid] Famous crypto analyst Michael Van De Poppe pointed out to BeInCrypto:
【Conclusion: CPI Becomes a Short-term Deciding Factor, On-chain Recovery Lays the Foundation for the Medium-term】 Bitcoin quickly fell back after hitting $122,000, highlighting the cautious sentiment in the market ahead of key resistance levels. The upcoming US CPI data will serve as a catalyst to break the deadlock, with its high correlation (0.76) with US stocks indicating that the data outcome will indirectly influence coin prices by affecting overall risk appetite. A CPI below expectations could help Bitcoin break through the $120,000 resistance and regain upward momentum; a CPI above expectations may prolong the volatility. The positive aspect is that on-chain data has shown encouraging changes: the selling by long-term holders has significantly slowed down, new users continue to enter the market, and activity has reached a nine-month high, laying a more solid foundation for Bitcoin's mid to long-term trend. Regardless of the CPI outcome, these positive on-chain signals are worth investors' close attention.