Bitcoin traders warn $123k was a top: how low can BTC price go?

Bitcoin Price Under Pressure: Decoding Bearish Signals and Potential Downside

Bitcoin (BTC) has recently seen a notable decline, dipping below the crucial $115,000 mark for the first time since late July. This inability to decisively break above the $120,000 resistance level for over three weeks is raising serious questions about the short-term sustainability of its uptrend. For investors and traders, understanding the underlying technical and on-chain signals is paramount in navigating these volatile waters and making informed decisions.

The $115,000 Battleground: Will Bitcoin Hold?

Currently, Bitcoin is engaged in a critical battle at the $115,000 support level, an area market analysts, including Michaël van de Poppe, have identified as essential for the continuation of its uptrend. A sustained breach below $115,600 could trigger a cascade of long-side liquidations, potentially pushing BTC price back into the $110,000–$112,000 range. Recent market movements have already seen significant long BTC liquidations, underscoring the immediate pressure Bitcoin is facing. Should the $116,000 level not be reclaimed swiftly, the probability of a deeper correction, potentially towards $104,000, increases significantly. This highlights the delicate balance Bitcoin currently maintains and underscores the importance of monitoring these immediate support zones.

Bearish Divergence: A Strong Signal for Deeper Correction

Adding a more profound layer to the short-term bearish sentiment is the classic bearish divergence observed on Bitcoin’s weekly chart. While the price of BTC/USD has formed higher highs in recent months, the Relative Strength Index (RSI), a key momentum indicator, has simultaneously registered lower highs. This divergence is a textbook sign of waning bullish momentum and often precedes significant pullbacks. Historically, similar signals have appeared ahead of major market tops, such as the one witnessed in 2021. If this pattern holds, Bitcoin could retrace towards its 50-week exponential moving average (EMA), which currently sits near $92,000. This 50-week EMA has historically acted as crucial support during previous bull market corrections, making it a logical and concerning target for a potential mid-cycle correction.

Echoing this sentiment, crypto trader AlejandroBTC has pointed out a "triple bearish divergence" on the monthly RSI, suggesting that Bitcoin’s current cycle might be nearing its conclusion. Such macro-level technical signals demand serious attention from market participants, signaling a need for caution and strategic re-evaluation.

Profit-Taking Pressure: Insights from NUPL

Further reinforcing the cautionary outlook is Bitcoin’s Net Unrealized Profit/Loss (NUPL) metric. NUPL is currently positioned within the 0.5–0.6 zone, a range historically associated with local market tops. With over 92% of Bitcoin’s supply currently in profit at prevailing prices, there's an elevated likelihood of increased sell-side pressure as investors look to realize gains. Precedent for this can be seen in sharp corrections that followed similar NUPL setups in 2020, March 2024, and January 2025. This on-chain data provides a fundamental underpinning to the technical warnings, suggesting that the current market sentiment is ripe for profit-taking activity. Traders should be mindful that high unrealized profits often precede periods of increased volatility and potential pullbacks.

Navigating the Crossroads: What This Means for You

The convergence of these technical and on-chain indicators paints a picture of heightened risk for Bitcoin in the immediate future. While some bullish analysts still foresee Bitcoin breaking $123,000 and even reaching $138,000 or $150,000 later this year, the current signals suggest prudence. It is essential for traders and investors to:

• Monitor Key Support Levels: Pay close attention to the $115,000 and subsequent $110,000–$112,000 ranges. A decisive break below these could confirm further downside.
• Understand Divergences: Recognize that bearish divergences, especially on higher timeframes like weekly or monthly charts, are powerful indicators of potential trend reversals or significant corrections.
• Consider Profit-Taking Dynamics: Be aware that high unrealized profits in the market can lead to sudden sell-offs as participants lock in gains.
• Conduct Your Own Research: The cryptocurrency market is highly volatile and speculative. Always perform your due diligence and consult with financial professionals before making any investment or trading decisions.

While the long-term outlook for Bitcoin remains a subject of ongoing debate, the short to medium term appears to be signaling caution. Staying informed about these critical technical and on-chain indicators is key to making well-informed decisions in the current dynamic market environment.

Disclaimer: This article provides market analysis for informational purposes only and does not constitute investment advice. All investment and trading involve risk, and readers should conduct their own research and consult with a financial professional before making any decisions.