Bitcoin (BTC)’s explosive rally, which saw the asset hit an all-time high of over $125,000, appears to be losing momentum after hitting a final resistance level.
Based on forecasts by prominent online cryptocurrency analysts trading shotsBitcoin’s current state suggests the possibility of a short-term correction before the next big breakout.
This prediction is based on the technical formation of Bitcoin being rejected by the high trend line near $126,000 that has guided price action since July 14th.
This same trend line has repeatedly acted as a resistance line, marking the peak of Bitcoin’s previous rally during its ongoing three-month consolidation phase.
in TradingView The analyst noted in an Oct. 7 post that the current rejection mirrors earlier patterns seen in mid-July and mid-August, both of which triggered sharp retracements.
At the same time, the 4-hour Relative Strength Index (RSI) again shows a bearish divergence, with momentum forming lower highs while Bitcoin price forming higher highs, which is a sign of weakening purchasing power and a possible market high.
From a technical perspective, the correction could extend to the 0.382 Fibonacci retracement level around $119,500. This area has served as the minimum retracement level for all previous declines within the consolidation structure.
If Bitcoin can finally break above this last resistance level, it will likely confirm a bullish technical breakout and start a new uptrend.
Bitcoin price analysis
Meanwhile, Bitcoin has corrected almost 2% in the past 24 hours, settling at $122,597 at the time of writing, while the maiden digital currency is up 5% over the past week.
Technical indicators seem to point to a possible price correction, with some market participants suggesting there is room for further upside as long as the asset value remains above $120,000.
Indeed, institutional investors, who continue to inject capital through exchange-traded funds (ETFs), are increasing the likelihood that this support can be maintained.
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