Following its October 5 record high above $125,000, bitcoin experienced a swift correction, slipping by more than $2,000 within hours as traders evaluated likely bounce zones. Data from leading analytics platforms revealed the cryptocurrency retraced toward key technical levels, with particular focus on the 50-period exponential moving average (EMA) on the four-hour chart, currently situated just above $118,000.
Popular trader CrypNuevo highlighted that historical price action often features retracements to this EMA after extended rallies. In a detailed analysis, he noted previous cases where BTC/USD dipped toward the EMA before resuming upward momentum, suggesting that a pullback to approximately $118,500–$119,000 could offer a favorable entry for long positions. This scenario aligns with on-chain observations of sustained buy orders clustering around that level.
Meanwhile, derivative market metrics pointed to concentrated short positions near the newly established highs. The short ladder landscape indicated potential “bait” for bearish traders betting on a reversal. Skew, a prominent derivatives strategist, warned on social media that weekend pumps can mislead passive shorts into accumulating positions just above major resistance, only to trigger forced liquidations as prices move higher unexpectedly.
Coinglass data confirmed elevated liquidation events on both sides of the order book, underscoring the market’s reduced liquidity during off-peak hours. Traders cautioned that such volatility is common when major technical barriers are breached, and weekend trading should be interpreted cautiously due to lower volumes.
Despite the pullback, bullish sentiment remains intact, fueled by narratives around bitcoin as a hedge against fiat depreciation. Market observers have dubbed the recent move part of a broader “debasement trade,” in which investors seek protection from potential currency devaluation. JPMorgan analysts previously reported substantial institutional inflows, suggesting that continued demand could absorb short-term corrections and support further upside.
Looking forward, consensus among technical analysts calls for monitoring reaction at the $124,000 level, which acted as a previous breakout point. A successful reclaim and hold above this mark could pave the way for a retest of $130,000. Conversely, a decisive break below $118,000 may signal deeper consolidation toward $115,000, aligning with historical volatility patterns observed during major bull runs.
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