Bitcoin falls below $120,000
Bitcoin (CRYPTO:BTC)'s price surged to $123,250 before correcting to around $117,284, sparking debate over whether this marks a technical consolidation or a bearish trap.
Recent sharp pullbacks followed warnings from analyst accounts like Material Indicators that a buy wall near $120,500 was designed to lure late buyers ahead of a support test.
CoinGlass data identifies strong support at $118,800, with a potential deeper drop to between $114,000 and $115,000 if the correction continues.
“We must stay alert for manipulation. This move could be part of a weekly pump-and-dump pattern. Be careful.” Trader CrypNuevo cautioned.
Technical indicators present mixed signals. The Relative Strength Index (RSI) on the four-hour chart reached 75, indicating overbought conditions.
However, the Average Directional Index (ADX) stayed low at 12 on the daily timeframe, suggesting that the trend lacks maturity.
“Historically, when this indicator turns green (positive spread), bitcoin enters a parabolic rally, often driven by leverage and FOMO on derivatives.” CryptoQuant’s Joao Wedson noted, saying.
A decrease in stablecoin reserves on exchanges points toward diminishing liquidity that could temper enthusiasm without fresh capital inflows.
“We prefer to stay selective and not chase the rally. Consolidation would be healthy.” QCP Capital advised caution.
Despite these concerns, Bitcoin has risen over 10% in the past week, even after this post-all-time high correction.
Within 24 hours, $432 million in Bitcoin short positions were liquidated, highlighting continued volatility.
Support from strong holders is notable, with 81% of Myriad users expecting Bitcoin to remain above $100,000 throughout July.
The White House is scheduled to release a key crypto strategy report by July 22, which may influence market sentiment.
Economic uncertainty looms as the Trump administration’s “Big Beautiful Bill” threatens to increase the US deficit by $3.3 trillion.
Historically, such deficits have pushed investors toward scarce assets like Bitcoin.
However, tightening monetary policy by the Federal Reserve may dampen risk appetite and result in further market corrections.
Traders and investors remain watchful as Bitcoin navigates a critical phase following recent highs.
At the time of reporting, Bitcoin price was $117,074.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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