Bitcoin is currently at a crucial level after losing momentum from the $120,000 mark and experiencing increased volatility. The price is now testing the $112,000 support level, which is critical for bulls to defend to prevent further bearish pressure. While the overall trend remains positive in the long term, the short-term perspective has shifted toward weakness, with momentum indicators indicating a downward bias.
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Analysts view this moment as a potential turning point for the market. A robust defense of current levels could restore sentiment and allow Bitcoin to consolidate before making another attempt to breakout. Conversely, failing to maintain levels above $112K may lead to a sharper correction, setting the stage for deeper support levels.
Further emphasizing this cautious outlook, CryptoQuant’s head of research, Julio Moreno, presented new data indicating that the CryptoQuant Bull Score Index has transitioned to a neutral signal. This transition suggests that while selling pressure has not completely dominated the market, it is no longer in a clearly bullish position. The coming days will be critical in determining Bitcoin’s short-term direction.
Bitcoin Indicator Signals Caution
According to Julio Moreno, Bitcoin’s Bull Score Index has transitioned from a “Bullish Cooldown” phase to a “Neutral” phase. The index, which assesses overall market strength utilizing a blend of trading flows, investor behavior, and derivatives data, has declined from 70 to 50. This indicates a weakening of bullish momentum, leaving Bitcoin in a more balanced state between buyers and sellers.
Moreno remarked that “for risk management purposes, further softening in the index suggests that prices could decrease.” This indicates that while the neutral zone doesn’t yet confirm a downtrend, any further deterioration may heighten the likelihood of deeper corrections. Traders are watching upcoming sessions closely, as price movements around the $112K–$115K support zone will be pivotal in determining short-term direction.
The broader market context remains positive. Bitcoin has been in a consistent upward trend since 2023, a cycle that has yielded significant gains and propelled the asset to new all-time highs above $124K earlier this month. Many analysts opine that the market is now in the final phase of this bull run, where volatility typically intensifies and investor sentiment becomes divided between hopes of continuation and concerns of exhaustion.
As the month draws to a close, global macroeconomic factors—including interest rate policies, institutional inflows, and liquidity conditions—will be crucial. If Bitcoin maintains its support and the fundamentals stay robust, this neutral phase may simply indicate a healthy pause before the next upward movement. Conversely, if weaknesses persist, the market could be hinting at the onset of a deeper consolidation phase.
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Price Action: Testing critical Support Level
Bitcoin is currently trading around $112,837, following a sharp drop from its all-time high near $123,217. The daily chart indicates that BTC has dipped below the 50-day SMA ($116,158) and is now testing the 100-day SMA ($111,224) as support. This level has become essential for bulls to defend.
The rejection from the $123K zone underscores strong resistance overhead, resulting in several unsuccessful breakout attempts. This structure indicates that BTC has entered a consolidation phase, with the $111K–$116K zone acting as the immediate range. A decisive breakdown below $111K could pave the way toward the 200-day SMA ($100,597), a level many analysts view as the ultimate support for this cycle’s uptrend.
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Momentum indicators also reflect weakening bullish momentum, as recent candles depict lower highs and lower lows. However, maintaining levels above the 100-day moving average would bolster the bullish case, potentially setting the stage for a rebound towards $118K and eventually revisiting $123K.
Featured image from Dall-E, chart from TradingView
