Bitcoin’s recent price action has sparked renewed caution among traders, with major investors placing significant short bets and technical indicators hinting at a deeper correction. Market analysts warn that the leading cryptocurrency could retrace toward $74,000 if key support levels fail to hold.
Technical Pattern Raises Bearish Concerns
Bitcoin is currently trading within a rising wedge pattern on the weekly chart, a structure often associated with bearish reversals. The price is testing crucial support near the $110,000 region. A weekly close below this threshold may trigger a sharper decline, targeting the wedge’s projected downside level of approximately $74,000.
This potential drop represents a 34% decline from current prices and aligns with Bitcoin’s previous peak from March 2024. Analysts note a growing divergence between price movement and the relative strength index, signalling fading bullish momentum.
Analysts Warn of Impending Correction
Crypto analyst Captain Faibik believes Bitcoin’s rally is approaching exhaustion. He commented that although bulls remain in control for now, momentum is weakening, and a decisive break below the wedge could hand control to bears, leading to an aggressive correction.
Veteran trader Peter Brandt echoed a similar sentiment, suggesting a “major shakeout” could occur before any renewed push toward all-time highs above $126,000. While he dismissed the likelihood of an 80% crash reminiscent of past cycles, he noted a possible retracement to the $50,000–$60,000 range.
Whale Activity Signals Bearish Sentiment
On-chain data has revealed a surge in large-scale short positions. A prominent trader on Hyperliquid has opened a $140 million short position on Bitcoin using 5x leverage, with liquidation set at $137,700. This move follows another whale who recently expanded a $500 million short bet using 10x leverage.
These positions suggest increasing confidence among institutional traders that Bitcoin may experience further downside pressure in the short term.
Market Mood Shifts to Euphoria
The ratio of unrealised profit and loss (NUPL) has recently moved from the “optimism” zone into “euphoria,” a stage historically associated with market tops. Previous cycles have seen significant pullbacks after such sentiment shifts, reinforcing concerns of a forthcoming correction.
Key Support Levels in Focus
With Bitcoin hovering near critical technical levels, market participants are closely watching whether it can maintain support above $110,000. Failure to do so may confirm the bearish wedge pattern and open the path to deeper losses. If Bitcoin manages to hold, however, it could delay or soften the impact of any major retracement.
For now, heightened whale activity and mounting bearish signals suggest traders should brace for increased volatility as Bitcoin tests the resilience of its current market structure.
