Is the August storm coming? 5 warning signals that Bitcoin may sharply fall.

As July comes to a close, the Bitcoin market is witnessing notable fluctuations. In particular, the pressure to take profit has increased in the final week of the month, raising concerns about the potential for a significant turning point in the upcoming month of August.

According to analysis from experts and on-chain data, there are four main sources of selling pressure that are forming and could significantly impact the price trajectory of Bitcoin. So what are these factors and how could they affect market trends?

1. “Sleeping whales” wake up – Profit-taking pressure increases

In early July, BeInCrypto reported that a whale wallet holding up to 80,000 BTC had unexpectedly “woken up” after more than 14 years of inactivity. The sell-off transactions from this wallet, supported by Galaxy Digital, contributed to slowing down the rise of Bitcoin in the last week of the month.

The price of Bitcoin and the inflow/outflow of funds from the Galaxy Digital wallet | Source: CryptoQuantData from CryptoQuant shows that large withdrawals from wallets managed by Galaxy Digital often coincide with price corrections of Bitcoin.

Notably, on July 29, Lookonchain continued to record a series of withdrawal transactions, raising concerns about a new sell-off.

“Will Galaxy Digital continue to support customers selling BTC? In the past 12 hours, Galaxy Digital has transferred an additional 3,782 BTC ( worth approximately 447 million USD ), mostly directed towards exchanges,” LookonChain reported.

Not stopping there, recently, two whale wallets that had been ‘dormant’ for 6–14 years unexpectedly became active again. According to SpotOnChain, three other wallets – likely belonging to the same entity – also moved 10,606 BTC ( equivalent to about 1.26 billion USD ) after being ‘inactive’ for 3–5 years.

The simultaneous return of these long-term whale wallets is raising concerns that selling pressure could continue to increase in August.

2. Take profit pressure from the “diamond hands”

The second source of selling pressure comes from long-term hodlers (LTH), who are considered the “backbone” of the Bitcoin market.

According to CryptoQuant, LTHs started to withdraw capital when BTC hovered around the 120,000 USD mark at the end of July. This is a sign that cautious sentiment is increasing – many seasoned investors are choosing to take profit rather than continue holding amid a market environment that poses risks.

“Long-term hodlers have begun to realize net profits right at the resistance level of 120,000 USD - a significant psychological threshold in history. This indicates that a portion of investors who have held through multiple cycles are starting to take profit,” analyst Burakkesmeci commented.

Change in net position of Bitcoin LTH | Source: CryptoQuantIn Q1 2025, the net selling movement of this group contributed to pulling the price of Bitcoin down below 75,000 USD. If this trend continues, selling pressure may increase significantly in August, making the risk of a deep correction evident.

3. Increased cash flow from miners – Pressure of additional supply

The third factor comes from the amount of Bitcoin flowing out of miners’ wallets, an important indicator reflecting direct selling pressure from participants in mining.

Data from CryptoQuant shows that throughout July, the flow of BTC out of miner wallets began to increase again after a previous decline, indicating the possibility of a trend reversal.

According to convention, miners often sell Bitcoin to cover operating costs or to realize profits after significant price increases. If this selling trend continues, the selling pressure could become increasingly large, especially when combined with the actions of whales and long-term holders.

“The average amount of coin per transaction from miner wallets is increasing. If many miners simultaneously dump their reserves, this could create a supply shock, putting downward pressure on prices,” CryptoQuant warns.

Bitcoin miner cash flow | Source: CryptoQuant## 4. Selling pressure from American investors – Coinbase Premium indicator turns negative

The final factor comes from the behavior of U.S. investors, reflected through the Coinbase Premium indicator – which measures the price difference of Bitcoin between Coinbase and Binance. When this indicator is in negative territory, it indicates that Bitcoin is trading lower on Coinbase, reflecting weakened demand or stronger selling pressure from the U.S. market.

According to data from CryptoQuant, after a period of active maintenance, Coinbase Premium turned negative at the end of July - a signal that requires special attention.

“The Bitcoin Coinbase Premium has turned negative again. This indicates that demand in the US market is weakening. Caution is advised,” said an IT Tech analyst.

Bitcoin Coinbase Premium | Source: CryptoQuantAlthough negative premiums do not always lead to trend reversals, history shows that they often signal a slowdown in upward momentum. If selling pressure continues to increase, the risk of negative corrections in August is entirely possible.

5. Reversal signals from the MVRV ratio – Could August be a local peak?

After four consecutive months of price increases, some analysts are becoming more cautious about the outlook for August. According to statistics from Coinglass, the third quarter is typically the weakest quarter of the year, with August often recording the poorest performance.

Monthly profit of Bitcoin | Source: CoinglassNotably, CryptoQuant’s Yonsei analyst points out that the MVRV ratio – an indicator measuring Bitcoin’s valuation level – is approaching the peak cycle threshold, with this signal potentially appearing by the end of August.

In the 2021 cycle, the MVRV ratio formed a double top, accurately predicting the peak of the market. If history repeats itself, August could mark a local top, before Bitcoin enters a phase of correction or accumulation.

“We are entering a zone where optimism and caution must go hand in hand. This is the time to tighten risk management and maintain flexibility in strategy,” Yonsei emphasized.

Bitcoin Price and MVRV Ratio | Source: CryptoQuantDespite concerns about selling pressure, the latest report from Kaiko still expresses confidence in the resilience of the Bitcoin market. According to Kaiko, the current liquidity depth is large enough to absorb sell-offs, minimizing the risk of negative volatility spiraling out of control.

“Ample liquidity, large order execution capabilities, and increasing demand from asset management firms indicate the presence of seasoned institutional traders. They are less affected by short-term price fluctuations – a positive factor for BTC’s performance in August, which is expected to be quite volatile,” Kaiko stated.

Overall, the four sources of selling pressure – from long-term whale wallets, long-term holders, miners, and U.S. investors – along with the MVRV signal approaching the cycle peak are painting a cautious picture for Bitcoin in August. However, the depth of liquidity and the participation of financial institutions, as Kaiko emphasizes, are creating a “buffer” to help the market avoid severe crashes.

Based on these factors, three main scenarios for the upcoming August can be envisioned:

August could therefore be a pivotal period: both a challenge for those who expect the upward trend to continue and an opportunity for investors to restructure their portfolios, tighten risk management, and maintain flexibility in the face of unpredictable fluctuations.

Emma