Bitcoin Experiences Significant Correction from Record $125K High: Speculating on the Bottom for BTC Price

Bitcoin Faces Correction from Record Highs

Bitcoin recently set a new record over $125,000, but quickly retreated by more than $2,000. Traders are now deliberating on potential levels where the price could stabilize.

Key Highlights:

Bitcoin undergoes a retracement after peaking above $125,000.
Weekend trading has led to notable volatility in BTC prices.
Institutional interest is gaining attention as discussions around Bitcoin as a “debasement trade” escalate.

Bitcoin (BTC) saw new fluctuations as it prepared for Sunday’s market closure, following a drop from its all-time highs.

BTC/USD one-hour chart Source: Cointelegraph/TradingView

Analysis: Possible 4% Drop for BTC Price

Recent data from Cointelegraph Markets Pro and TradingView indicate that BTC/USD has fallen below $123,000. Earlier that day, the pair reached new highs above $125,000, driven by unusual trading in derivatives markets over the weekend.

Trader Skew expressed concerns that the bullish movement could serve as a trap for long positions, pointing out the behavior of traders shorting at peak prices:

“Shorts opening here on the consensus that the weekend pump is bait.”

BTC liquidation heatmap Source: CoinGlass

Participants in the crypto market often regard weekend price movements as unreliable due to inadequate liquidity. Trader CrypNuevo suggested future support might center around the 50-period EMA, currently resting just above $118,000:

“For the week ahead, I think we could see a 4h50EMA retest - it’s overextended and you can see retests in previous similar price action.”

BTC/USDT four-hour chart with 50EMA Source: CrypNuevo/X

Analyzing BTC potential, Rekt Capital pointed out the resistance at $124,000 could take longer than expected to breach:

“There should be no surprise that Bitcoin has rejected from ~$124k on the first time of asking in this uptrend. The last time it faced this resistance, there was a -13% pullback.”

BTC/USD one-week chart Source: Rekt Capital/X

Rekt Capital noted that BTC/USD could drop as much as 4% while still maintaining its weekly upward trend.

Bitcoin “Debasement Trade” Gains Momentum

Optimistic views are highlighting emerging institutional appetite. Caleb Franzen, from Cubic Analytics, noted the current strong demand reflected by minimal pullbacks amid notable surges in prices:

“When I see short-term price action like this, with minimal pullbacks and large spikes to the upside followed by sustained bids, I see institutions.”

Commentators in traditional finance have marked Bitcoin’s role as part of the “debasement trade,” where investors seek protection against fiat currency devaluation.

“Digital #Gold - aka #Bitcoin – is matching its counterpart by crossing the $125k milestone in the ongoing debasement trade, as buyers hedge against currency reduction.” — Holger Zschaepitz (@Schuldensuehner)

Cointelegraph highlighted this trend, initially described by JPMorgan analysts at the year’s onset. This content does not offer investment guidance or recommendations. All trading decisions entail risks, and readers are advised to carry out personal research before deciding.