Bitcoin (BTC) is flirting with $120,000 again, but there’s a growing tug-of-war between leveraged optimism and quiet spot distribution behind the scenes.

This is according to pseudonymous analyst Mr. Wall Street, who warned on July 20 that while short-term momentum remains intact, BTC’s mid-term trajectory may be weakened as long-term holders start to cash out.

Bull Case Amid Bearish Undercurrents

In his assessment, Mr. Wall Street noted that the world’s number one cryptocurrency has secured its local bottom around $116,000, following a predicted pullback. He believes the asset will rise to between $120,000 and $123,500 in the short term, before a mid-term run pushes it towards the $133,000 to $140,000 range.

However, the market watcher tempered his positive outlook with a critical on-chain observation: wallets that accumulated heavily at the $16,000 to $20,000 cycle lows in August 2022 have started offloading spot holdings, a pattern he says is eerily similar to what preceded the last cycle top. If that setup repeats, their selling this week could signal a potential market top forming by late October or early November.

“It’s clear that these individuals know how to play this game,” noted the expert. “The fact they have already started to reduce the size of their own spot positions, after holding for three years, is a sign that they are anticipating a cycle top coming soon.”

His assessment isn’t far from that shared by technical analyst CryptoVizArt, who cited CryptoQuant data showing that BTC reserves on centralized exchanges have risen to their highest since June 25. Historically, such increases often suggest growing sell-side pressure and typically come before local tops.

“The market is getting weaker, regardless of what the charts are showing us,” warned Mr. Wall Street on X.

Macro Crosswinds

The immediate outlook still faces a few tests, including the July FOMC meeting, even though no rate cut is expected. According to Mr. Wall Street, markets are pricing in potential September cuts, which could fuel a pre-meeting pump followed by a sell the news event.

Meanwhile, Bitcoin was trading at $119,269 at the time of this writing, up a slight 0.9% over 24 hours but down 2.9% over the past week. Additionally, it gained 9.4% over two weeks and 15.3% in the past 30 days, but remains 2.9% below its July 14 all-time high.