Highlights:
Bitcoin might have peaked at $119,500, as price indicators indicate an “overbought” status.
Traders are looking for a support retest to stabilize the recent rebound, which is approaching a 10% increase over the week.
ETF inflows reached $1.6 billion in just three days, with IBIT advancing into the top 20 ETFs by assets.
Bitcoin (BTC) appears poised for a short-term pullback and support retest as price indicators signal “overbought.”
Traders cautioned on Thursday that BTC/USD could decline after reaching six-week highs above $119,000.
RSI Indicates BTC Price May Need a Pause
Bitcoin has surged almost 10% over the past week as buyers make a comeback, mirroring the rise in gold.
Despite moving past $119,500 on Bitstamp, based on data from Cointelegraph Markets Pro and TradingView, market participants believe the rally may need to cool before any further advances can be made due to overheated price indicators.
“Considering this further, a pullback/retest seems logical as shown by LTFs,” trader Roman noted in an X post on the matter.
“All indicators are overbought, but there are no signs of immediate weakness. Simple breakout & retest.”
Supporting this move is the relative strength index (RSI), which is now deeply in “overbought” territory at nearly 90/100. This represents the highest four-hour readings since July, when BTC/USD first crossed above $123,000.
RSI is a well-regarded leading indicator, and high values on lower timeframes can precede market reversals.
In contrast, on daily and weekly charts, the RSI has remained “overbought” during the final stages of previous bull markets.
“Volume, RSI, & MACD appear favorable for a continuation towards $124k in the coming days,” Roman concluded.
Bitcoin ETFs Highlight Bullish Trends
Continuing with the RSI theme, Caleb Franzen, founder of financial research resource Cubic Analytics, identified a bullish divergence between Bitcoin and the S&P 500 on Wednesday.
Related: Bitcoin aims for $118K as analysis regards US government shutdown as a ‘non-event’
This observation was made while analyzing the largest US spot Bitcoin exchange-traded fund (ETF), BlackRock’s iShares Bitcoin Trust (IBIT).
Bullish RSI divergence for Bitcoin relative to the S&P 500 (IBIT/SPY). pic.twitter.com/hGH2XZoPWc
— Caleb Franzen (@CalebFranzen) October 1, 2025
According to data from UK-based investment firm Farside Investors, net inflows across the US ETF sector surpassed $1.6 billion this week, with IBIT accounting for $600 million of that total.
Additionally, Eric Balchunas, an ETF analyst at Bloomberg Intelligence, confirmed its rise into the top 20 largest ETFs by assets.
“Someone asked me how long until it reaches the Top 10. It’s $50 billion away. If the last 12 months are any indication, it might not take long. It attracted $40 billion over the last year and increased by 85%,” he shared on X.
“That said, other ETFs are also growing, so I can’t say for sure. If I had to guess, I’d set the over/under for Christmas 2026.”
This article does not offer investment advice or recommendations. Every investment and trading action carries risk, and readers should perform their own research before making any decisions.
