Highlights:
Bitcoin initiates a retracement following new all-time highs exceeding $125,000.
Trading on Sunday creates volatility in BTC prices as traders observe potential bounce points.
Institutional interest is increasing as discussions around Bitcoin as a “debasement trade” intensify.
Bitcoin (BTC) faced new volatility as it approached the weekly close on Sunday, following a price correction from its recent all-time highs.
Analysis: 4% BTC price drop anticipated
Data from Cointelegraph Markets Pro and TradingView indicated that BTC/USD has dropped below $123,000.
The pair had earlier reached record highs above $125,000, driven by unusual weekend trading in derivatives markets.
Reflecting on the recent price movements, renowned trader Skew cautioned that the upward movement could be a “trap” for long positions.
“Passive shorts are compounding here,” he noted in a post on X, referring to traders looking to short the price at its peaks.
“Shorts opening here based on the belief that the weekend surge is a trap.”
Information from CoinGlass revealed that liquidity on exchange order books was being affected on both sides of the price.
Crypto market players typically view weekend price movements as unreliable indicators of future trends due to lower market liquidity.
As for estimating potential retracement lows, trader CrypNuevo suggested the 50-period exponential moving average (EMA) on four-hour charts, currently just over $118,000.
“For the upcoming week, I believe we might see a retest of the 4h50EMA – it’s currently overextended and similar price action in the past shows retests,” he wrote in an X thread.
“After that, we should see a new upward movement. Thus, I still prefer longs over shorts at the 4h50EMA.”
Notable trader and analyst Rekt Capital also utilized historical data to forecast BTC price trends. He mentioned that breaking above $124,000 may require time.
“It’s no surprise that Bitcoin faced resistance around ~$124k on the first attempt during this uptrend. Previously, when Bitcoin hit $124k, it resulted in a -13% pullback,” he noted.
“Bitcoin must demonstrate that the $124k resistance is becoming a weaker rejection point. A shallower dip or pullback from here could achieve that.”
Rekt Capital further indicated that BTC/USD might decline by as much as 4% while still maintaining the weekly upward trend.
Bitcoin “debasement trade” gains momentum
Optimistic narratives highlighted the growing institutional interest.
Related: JPMorgan, Citi foresee Bitcoin Q4 surge: Here are their price projections
Caleb Franzen, founder of financial research platform Cubic Analytics, stated that the lack of significant pullbacks in BTC prices illustrates substantial demand.
“When I observe such short-term price behavior, with minimal pullbacks and pronounced increases followed by steady bids, I attribute it to institutions,” part of various updates on X from the day stated.
Mainstream financial analysts noted Bitcoin’s role in the “debasement trade,” referring to investors’ inclination to protect against the decreasing value of fiat currencies.
Digital #Gold – aka #Bitcoin – is mirroring its traditional counterpart, attaining a new record high >$125k – a significant milestone in the ongoing debasement trade, as investors seek refuge from currency devaluation. pic.twitter.com/KHjeet5EW8
— Holger Zschaepitz (@Schuldensuehner) October 5, 2025
Cointelegraph covered this trend, which was first identified by analysts at JPMorgan earlier this year.
This article does not constitute investment advice or recommendations. Every investment and trading action carries risk, and readers should conduct their own research before making decisions.
