Will Bitcoin’s Recent High Be a Local Top?
After a period of strong performance, Bitcoin is facing significant selling pressure. It recently dropped below the $115,000 mark for the first time since July 25. The inability of BTC to break past the $120,000 resistance level has led many traders to question the longevity of the current uptrend. This price action, combined with a cascade of long-side liquidations totaling $172 million, signals that a deeper correction may be on the horizon. The key now is whether Bitcoin can reclaim the crucial $115,000 support level. If it fails, the price could drop toward the $110,000-$112,000 range. A more significant drop could follow if the price cannot recover quickly.
Bearish Divergence on the Weekly Chart
One of the most compelling bearish indicators is the classic divergence between price and momentum on Bitcoin’s weekly chart. Over the past few months, the BTC/USD pair has been forming higher highs in its price, while the Relative Strength Index (RSI), a momentum oscillator, has been forming lower highs. This kind of signal, where the price action and the momentum indicator are moving in opposite directions, often precedes a major market pullback. This pattern was also seen before the 2021 market top, suggesting a potential for history to repeat itself. If it does, Bitcoin could retrace toward its 50-week exponential moving average, which is currently near $92,000. This is a significant support level that has held during previous bull markets.
Is a Cycle-Ending Signal Flashing?
The bearish divergence isn’t limited to the weekly chart. One crypto analyst has pointed out a “triple bearish divergence” on the monthly RSI, which they believe is a clear signal that Bitcoin’s current market cycle may be nearing its end. This view suggests that the bullish momentum is waning on a macro level, indicating a substantial shift in market dynamics. While such a claim is significant, it aligns with other technical and on-chain metrics that are also flashing warning signs for the short to medium term.
Rising Profit-Taking Pressure
Another on-chain metric, the Net Unrealized Profit/Loss (NUPL), is reinforcing the bearish sentiment. The NUPL metric is currently in a range that has historically been associated with local market tops. With over 92% of Bitcoin’s supply now being in profit, there is an increased likelihood of sell-side pressure as long-term holders and new investors alike look to secure their gains. Similar setups in the past, such as in 2020 and early 2024 and 2025, have been followed by sharp price corrections. This suggests that the current price level is ripe for a potential pullback as profit-taking becomes more prevalent.
Bullish Outlooks Remain, Despite the Warnings
Despite these bearish signals, some analysts still maintain a bullish long-term outlook for Bitcoin. Some believe that the market is not yet “overheated” and that a price target of $138,000 is still achievable. Other optimistic analysts anticipate that Bitcoin has as many as three months left in its current run, with a potential price top around $150,000. These bullish predictions are often based on factors such as continued institutional demand and the token’s growing status as a store of value.
The Tug-of-War Between Bulls and Bears
The current market is a battle between technical indicators and optimistic sentiment. The technical analysis points to a possible correction, with a key support level at $115,000 and a potential deeper retrace toward $92,000. The on-chain data also suggests that the market is due for a cooldown as profit-taking increases. However, the overall bullish sentiment remains strong, with some analysts seeing a price target of up to $150,000 before the cycle concludes. Investors are now watching to see which side will prevail as Bitcoin navigates this period of uncertainty.
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