Key takeaways:
BTC price might fall to the $118,000-$120,000 range before continuing its upward trend, according to analysts.
Bitcoin futures open interest has decreased by $4.1 billion from its peak, possibly indicating a “healthy” reset.
Bitcoin (BTC) has fallen 3.7% from its $126,000 all-time high and could revisit the $118,000 mark in the coming days, although data suggests that extended trading below that threshold may be temporary.
Bitcoin might drop to $118,000 first
On Friday, Bitcoin price was at $121,300, reflecting moderate losses over the previous 24 hours, according to data from Cointelegraph Markets Pro and TradingView.
Despite a bullish macro environment, analysts concur that the BTC/USD pair might first decline toward the $118,000-$120,000 range before resuming its upward trajectory.
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“Here we go with the shakeouts to both sides,” noted analyst Stockmoney Lizards, emphasizing that such price movements are typical after Bitcoin reaches new all-time highs.
“This flush should conclude soon, around $118,000-$119,000, then upwards,” the analyst added.
“It appears that $BTC aims to retest the support level of $118,000-$120,000,” fellow analyst Ted Pillows stated in a Friday post on X.
The analyst observed that strong bids are positioned on exchanges at this level, indicating that the BTC/USD pair may likely drop toward it.
“Following that, a rally is anticipated if buyers engage.”
Meanwhile, Glassnode’s Cost Basis Distribution Heatmap pointed out support around $117,000, where approximately 190,000 BTC were last purchased.
MN Capital founder Michael van de Poppe had a differing opinion, claiming that Bitcoin has already seen its correction following its rapid drop to $119,700 during the late trading hours in New York on Thursday.
“It is primed to continue towards new all-time highs.”
Similarly, AlphaBTC stated that the price has cleared liquidity on the downside, reaching down to $118,000, with traders now targeting liquidity above $126,000.
Bitcoin futures OI drops by $4.1 billion
Bitcoin’s futures open interest (OI) saw a $4.1 billion decline as the BTC price dropped to $119,700 from $126,000, according to data from CoinGlass.
This trend can be perceived as a healthy market adjustment, reflecting the liquidation of over-leveraged positions, which reduces market exuberance.
Onchain data provider Glassnode said that although OI has slightly decreased from its all-time high, it “remains elevated as both longs and shorts are being whipsawed by sharp price fluctuations,” adding:
“The market is experiencing a leverage reset, with volatility clearing excess positions on both sides.”
High OI is often a sign of over-leveraged trading, which can increase volatility. A minor price drop can trigger numerous liquidations, allowing for the clearing of speculative positions and market stabilization.
This article does not offer investment advice or recommendations. All investment and trading actions involve risk, and readers should perform their own research when making decisions.
