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Bitcoin is experiencing a minor retracement following its new peak of $123,000 on Monday. Despite the overall trajectory remaining positive, short-term sentiment has transformed as selling pressure starts to escalate. Bullish traders are now safeguarding essential support levels, with the $117,000 area becoming a pivotal threshold that could establish whether the upward trend persists or if more significant corrections are imminent.
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The pullback has instigated new uncertainty within the market. Recent information from CryptoQuant indicates that Bitcoin Futures Position Dominance has begun to take a bearish turn, implying that short positions are increasing in significance across leading derivatives platforms. This transition mirrors heightened caution among traders, especially as long-to-short ratios weaken and funding rates stabilize after weeks of heightened bullish behavior.
Although Bitcoin remains significantly above its 2024 peaks and the macro setup still favors bulls, the present pause is under careful observation. Investors seek affirmation that the recent record high was not simply a transient peak. With anxiety gradually setting in and derivatives data signaling initial warning signs, the next few days could be crucial. The ability of bulls to maintain their position—or if bears gain dominance—will likely dictate Bitcoin’s forthcoming substantial movement.
Bitcoin Pulls Back As Pessimistic Sentiment Surges
Bitcoin has retreated over 5% since hitting its all-time high of $123,000 earlier this week, with current price movements scrutinizing the robustness of short-term support levels. While retracements are typical following significant breakouts, some analysts observe that Bitcoin’s drop has been more pronounced than that of Ethereum and several altcoins, which have either stabilized or continued to rise.
Leading analyst Axel Adler emphasized a noteworthy change in sentiment after the ATH. According to his observations, bears commenced aggressive short-selling immediately after the price peak, resulting in a significant decline in bullish dominance. Most significantly, the long-to-short ratio has flipped into negative territory for the first time in weeks, indicating a clear uptick in short interest across derivatives platforms.
This shift in positioning reveals increasing caution among traders and heightens the stakes for bulls. The $117,000 mark is now regarded as a crucial support zone—if Bitcoin fails to maintain its position above it, a more pronounced correction could ensue, potentially influencing the broader market adversely.
The timing is particularly significant. This week, the US Congress commences “Crypto Week,” a series of discussions and potential votes on vital legislation that could alter the regulatory framework for digital assets. The results of these discussions could serve as a catalyst for renewed bullish activity—or exacerbate the correction if uncertainty prevails. As markets prepare for clarity, attention remains fixed on Bitcoin’s capacity to sustain $117K and regain its short-term trend.
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BTC Pulls Back: $114K–$117K Critical Zone to Monitor
The 4-hour chart indicates Bitcoin has retraced sharply after reaching an all-time high of $123,200 earlier this week. Currently trading at $116,900, BTC has fallen more than 5% from its recent peak, marking its first substantial correction since the breakout above $109,300.
This decline brings Bitcoin back toward the $114,000–$117,000 region, which now serves as short-term support. This zone corresponds with the ascending 50-period simple moving average (SMA) at $114,466 and closely aligns with the preceding breakout structure. A successful retest of this range could lay the groundwork for a new surge.
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However, failure to maintain this area could pave the way for a deeper decline toward the $109,300 support level, which acted as multi-week resistance throughout May and June. The negative momentum in the most recent candles, combined with elevated sell volume, indicates growing short-term apprehension. Nevertheless, Bitcoin remains above all key moving averages on this timeframe (50, 100, and 200 SMAs), suggesting that the overarching trend still holds.
Featured image from Dall-E, chart from TradingView
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