Bitcoin recently achieved a remarkable new peak, exceeding $125,000, before experiencing a notable drop of over $2,000. Traders are now assessing potential rebound areas for BTC.

Key Highlights:

• Bitcoin is encountering retracement after setting new highs above $125,000.
• A lot of activity on Sunday has led to significant volatility in BTC prices as traders contemplate possible support levels.
• Institutional interests in Bitcoin are gaining attention amid rising discussions about the cryptocurrency as a hedge against currency devaluation.

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

Data from Cointelegraph Markets Pro and TradingView indicates a retracement, with BTC/USD moving below $123,000. Earlier in the day, the cryptocurrency reached an all-time high of over $125,000, driven by unusual trading activity in the derivatives market.

Trader Skew expressed concern that the uptrend might be a trap for long positions, stating, “Shorts opening here on the consensus that the weekend pump is bait.”

Weekend trading is generally seen as unreliable due to lower liquidity, which can lead to misleading price movements. Some traders, such as CrypNuevo, suggest that the price could retest the 50-period EMA circa $118,000. Furthermore, popular analyst Rekt Capital noted that historical data suggests it could take time to firmly break above $124,000, and a drop of up to 4% may not invalidate the ongoing upward trend.

As discussions around Bitcoin as a ‘debasement trade’ amplify, financial analysts emphasize its role as a hedge for those seeking to protect against diminishing fiat values.

“Digital #Gold - aka #Bitcoin – is hitting a new record high >$125k – a sign of ongoing currency devaluation trends,” tweeted Holger Zschaepitz.

This article is not intended as financial advice. Readers are encouraged to conduct independent research before making investment decisions.