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Key Takeaways
- Bitcoin faces critical resistance at $115,000, down from its July 25 high near $120,000.
- Technical indicators point to a heightened risk of a significant price correction.
- Signals suggest profit-taking is increasing, raising the possibility of prices approaching $104,000 before a deeper pullback.
Bitcoin experienced sharp losses on Friday, briefly dipping below the $115,000 level for the first time since July 25. This drop occurred despite failing to breach sturdy resistance around $120,000, casting doubt on the sustainability of the ongoing uptrend.
$115K Support Under Pressure
Bitcoin’s position near the $115,000 support level is attracting significant attention. Persistently failing to hold this level since late July piques concerns about potential downside.
Market analyst Michaël van de Poppe highlights the importance of this $115,600 threshold. He suggests a break below could trigger cascading liquidations among long positions, potentially driving BTC back toward the $110,000–$112,000 region.
CoinGlass data indicates heightened selling pressure on Friday, with $172 million worth of long Bitcoin positions liquidated during a key pullback to an intraday low near $114,100. Analysts caution that failing to reclaim $116,000 significantly increases the probability of a correction extending down to $104,000.
Signals for a Potential $92K Target
Adding to the bearish sentiment, a divergence has emerged between Bitcoin’s price and its relative strength index (RSI) on the weekly chart.
Rising Bearish Divergence: While the price made higher highs since restarting gains in March, the RSI indicator formed lower highs. This classic technical signal typically suggests weakening momentum, even if the price remains in an uptrend.
Historical Context: The divergence, reminiscent of the one preceding the 2021 market peak, could presage a substantial correction. If current consolidation holds, this might potentially target BTC’s 50-week exponential moving average near $92,000.
This weekly price chart confirms a similar bearish divergence reading on the monthly chart by the analyst AlejandroBTC, further reinforcing concerns the cycle’s conclusion is near.
Profit-taking Intensifies
Tighter risk-on/risk-off sentiment readings in indicators like the Net Unrealized Profit/Loss (NUPL) suggest Bitcoin holders are increasingly selling their positions.
The current NUPL reading, hovering between 0.5–0.6, is often classified as an overbought territory historically associated with local tops. This signals strong positive sentiment – or more critically, significant realized gains being cut.
Approximately 92% of all Bitcoin supply is currently in a realized profit state. This widespread accumulation has created the environment for heavy sell-side pressure should selling sentiment intensify.
Historical patterns demonstrate that past instances when NUPL entered this territory (e.g., late 2020, March 2024) frequently preceded sharp market downturns. While a three-week failure to reclaim $120,000 raises concerns, earlier sharp moves below $115,000 also occurred before major tops near $138,000 and eventually $150,000.
Bitcoin Weekly Chart and RSI divergence (source: Cointelegraph/TradingView)
Bitcoin NUPL vs. Price Performance (source: Glassnode)
Disclaimer added.
