Bitcoin’s (BTC) push toward its January all-time high above $109,000 is beginning to show signs of slowing momentum, with several key on-chain indicators flashing potential warning signals reminiscent of the 2021 cycle peak.
Over the past four years, Bitcoin has undergone a dramatic transformation. It has distanced itself from the shadow of failed centralized players like FTX and established itself as a favored asset among institutional investors. Yet, its latest rally — driven by easing global trade tensions and improved market sentiment — is revealing familiar fault lines.
Echoes of 2021
In 2021, Bitcoin set a then-record high of $65,000 in April amid headline events like MicroStrategy’s aggressive BTC accumulation and Coinbase’s public debut. That surge quickly unraveled as traders capitalized on hype, triggering a sell-off that saw prices plummet to $28,000 in just two months.
Despite bearish signals from on-chain metrics, Bitcoin rebounded sharply later that year, hitting a new high of $69,000. Now, analysts are spotting similar dynamics in play — raising the possibility of a 2021-style double top.
Signs of Weakening Momentum
One of the clearest indicators is the weekly Relative Strength Index (RSI), which has shown bearish divergence on three occasions — March 2024, December 2024, and May 2025. This means while prices have climbed, RSI has trended downward, suggesting weakening momentum.
Trading volumes are also cooling. Compared to Bitcoin’s first push past $100K, recent volume across major venues — including the CME — has significantly declined. CME Bitcoin futures have struggled to top 35,000 contracts in three of the last four weeks, well below the 65,000–85,000 range seen during January’s breakout. Each CME contract represents 5 BTC, currently valued at over $500,000.
Open interest is another metric diverging from price. Today, open interest is 13% lower than it was during January’s rally, while BTC trades just 5.8% below its previous high. A similar gap occurred in late 2021 when open interest dropped even as Bitcoin hit a new peak.
Structural Differences — and Risks
While historical parallels are clear, today’s market structure differs significantly from 2021. Institutional adoption is far deeper, led by the likes of Michael Saylor’s MicroStrategy and other corporate buyers. The arrival of spot Bitcoin ETFs has also made BTC more accessible through traditional investment channels.
Still, this doesn’t guarantee sustained upside. On-chain metrics are not foolproof predictors, as 2021 proved. Bitcoin could still set a new all-time high, especially if former President Trump delivers on speculation around a U.S. government Bitcoin treasury announcement. But such a move could also prompt a classic “sell-the-news” reaction, with smart money offloading into euphoric retail demand.
A Word of Caution
Even if Bitcoin breaks higher, analysts warn that this rally lacks the underlying momentum seen earlier in the year. Bold predictions calling for $150K or $200K targets may prove premature if profit-taking accelerates. The end of 2021 saw Bitcoin tumble into a year-long bear market that triggered widespread layoffs and liquidations across crypto firms, lenders, and DeFi protocols.
This cycle brings additional complexities. MicroStrategy’s leveraged BTC holdings, the emerging Bitcoin DeFi ecosystem with over $6.3 billion in total value locked, and capital sloshing through highly speculative memecoins all present systemic vulnerabilities in a downturn.
While investor sentiment remains elevated, the technical picture suggests caution. Bitcoin may still have more upside — but history, and the charts, say it might not come easy.
