Bitcoin price forecast: a retracement might draw dip buyers close to $120,000
As the alpha cryptocurrency continued to retreat from the most recent all-time high of $126,000, the price of bitcoin resumed its decline on Thursday, falling by about 1.5% during the European session. A bearish order block that is now a crucial anchor defending the all-time high was formed when the retracement that started earlier in the week on Tuesday drove BTCUSD to a four-day low at $120,700.
After being rejected by the bearish order block, Bitcoin drops 1.5% and approaches the $120,700 support level.
Reduced speculative leverage across the Bitcoin market is indicated by the drop in open interest to $42 billion.
A retracement may be prolonged prior to a possible rebound, as indicated by the RSI bearish tone and declining volume.
After that decline, Bitcoin experienced a modest recovery in the middle of the week, reaching an intraday high of $124,300 before finishing at $123,400. The price was rejected from the daily bearish order block, which strengthened the short-term resistance zone, and the recovery effort failed. The price dropped to an intraday low of about $121,600 as a result of that rejection, which has now continued into Thursday’s trading and raised the possibility of another test below Tuesday’s low of $120,700.
The general market sentiment remains largely upbeat in spite of this recent downturn. The rising greed among retail participants is reflected in the Binance Fear and Greed Index, which is currently reading 62. The steady inflows into U.S. Bitcoin ETFs demonstrate the enduring institutional interest in this sentiment. However, given that both open interest and trading volume have decreased over the last two days, the technical picture indicates that momentum has cooled in the near term. The drop in open interest from the peak of $46 billion to $42 billion suggests a decline in speculative activity and waning exposure to debt.
Bitcoin RSI in bearish territory confirms risk of further short-term losses
Volume has also been tapering through today’s downturn on the intraday chart, which suggests that profit-taking rather than new selling pressure may be the primary driver of the current retracement. Short-term momentum is still negative, though, as the 4-hour RSI is well into bearish territory. This strengthens the argument that the current week-to-date loss of 1.4% may continue to grow in the upcoming sessions.
Broadly speaking, the rally’s framework, which started in late September, remains the same. Given that both institutional and individual traders are still long, the current drop may be a constructive correction inside a broader bullish framework. The psychological level of $120,000 is a possible draw for dip-buying activity.
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