Bitcoin is losing its bullish momentum: Is a drop to $115K next?

Bitcoin is signaling potential short-term weakness, with key indicators pointing to a possible dip below $115,000. While the long-term bullish outlook for BTC remains, traders should brace for increased volatility and a likely corrective move in the near future.

Bearish Momentum Indicators Emerge

A primary technical signal for a potential pullback is a hidden bearish divergence between Bitcoin's price and its Relative Strength Index (RSI). This momentum indicator measures the strength of price movements. A hidden bearish divergence occurs when Bitcoin's price registers higher highs, but the RSI forms equal or lower highs. This discrepancy suggests weakening bullish momentum, often preceding a downside correction. A similar pattern in March 2024 led to a significant 20% price drop. The current setup mirrors this precedent, indicating another corrective phase might be approaching, potentially pushing prices to fresh short-term lows.

The Magnetic Pull of the CME Gap

Another compelling factor is an open CME (Chicago Mercantile Exchange) gap, specifically between $114,380 and $115,635 on the daily chart. CME gaps form when Bitcoin trades outside regular CME hours, creating price voids. Historically, Bitcoin tends to "fill" these gaps, meaning the price often retraces to cover the untraded range. In 2025, seven out of nine CME gaps have already been filled, underscoring this phenomenon's reliability. The outstanding gap in the $114,000-$115,000 range, along with a smaller one near $92,000, suggests a strong gravitational pull for Bitcoin's price to revisit and close these levels, contributing to a short-term downward movement.

Bitcoin Enters Distribution Zone

Adding to the cautious outlook, the Index Bitcoin Cycle Indicators (IBCI) has entered the "distribution zone." This region is historically linked with market euphoria and interim market tops within a larger bull cycle. According to crypto analyst Gaah, this is the third such entry in the current bull cycle.

While the index has only touched the lower base (80%) of this zone, not the 100% peak seen at past major cycle tops, its entry is a significant warning. Supplementary indicators like the Puell Multiple and STH-SOPR are not yet signaling peak retail speculation or aggressive miner profit-taking. This nuanced view suggests we are in a high-risk zone for short-term corrections, but not necessarily at the immediate end of the broader bull market.

Key Insights for Traders: Prepare for Volatility

• Fading Momentum: The hidden bearish RSI divergence indicates diminishing buying pressure and a higher likelihood of short-term corrections.
• Price Target: The CME gap at $114,380-$115,635 is a strong technical target for a retracement, supported by historical patterns.
• Cyclical Warning: The IBCI's entry into the distribution zone signals elevated short-term corrective risk, advising caution.

Actionable Advice: Navigate the Dip Strategically

Given these converging signals, traders and investors should prepare for potential short-term volatility and a possible dip in Bitcoin's price. It's crucial to distinguish this as a likely corrective move within an ongoing bull cycle, rather than a reversal of the long-term trend. This period could offer opportunities for those looking to accumulate Bitcoin at more favorable prices, but it demands careful risk management. Always conduct your own thorough research and align decisions with your overall investment strategy. Informed and agile decision-making will be vital in the weeks ahead.