Key Insights:

• Analysts indicate that Bitcoin (BTC) might see a dip to the $118,000-$120,000 range before resuming its upward trend.
• The futures open interest has recently decreased by $4.1 billion, which might signify a “healthy” market reset opportunities for buyers.

Bitcoin underwent a 3.7% drop from its peak of $126,000 but shows signs that trading below $118,000 may not last long. Current trading data places Bitcoin at $121,300, marking a slight decrease over the past day, according to Cointelegraph Markets Pro and TradingView reports.

While the overall market setup remains positive, analysts believe a drop toward $118,000-$120,000 appears probable before any possible recovery.

“Here we go with the shakeouts to both sides,” noted Stockmoney Lizards, suggesting the volatility is normal following new highs. Translation: “Esto es normal después de que Bitcoin alcanza nuevos máximos históricos.”

He elaborated further, stating, “This dip should conclude soon around $118,000-$119,000, then rally higher.”

BTC/USD four-hour chart. Source: Stockmoney Lizards

Ted Pillows also articulated that Bitcoin seems eager to test its support level near $118,000-$120,000, hinting at strong buy orders in the market.

“A rally is anticipated following any buyer engagement after this level, " added Pillows. Translation: “Se anticipa un rally después de que entren compradores.”

On a different note, Michael van de Poppe asserts that Bitcoin may have already corrected sufficiently from its recent sharp drop, indicating readiness to pursue new all-time highs.

“The market might have already corrected itself after recent volatility,” he mentioned. Translation: “El mercado podría haberse corregido después de la reciente volatilidad.”

Furthermore, market data showcases that a reduction in open interest is closely linked to the liquidation of over-leveraged positions, subsequently decreasing market saturation. Such scenarios generally contribute to overall market stabilization.