Bitcoin Price Signals Potential Drop Below $117K

Bitcoin Chart Shows Bearish Daily Signal

Bitcoin's price chart indicates potential further downside following Monday's 2.6% decline from $122,200 to approximately $119,000. Crypto analyst Michael van de Poppe from MN Trading Capital described the formation as an "ugly daily candle" that could signal additional weakness.

The leading cryptocurrency has continued its decline since the initial drop, currently trading at $118,881 according to market data. This movement came despite early Monday optimism when Bitcoin surged over 3.3% to $122,150, bringing it closer to the all-time high of $123,100 reached in July.

Technical Analysis Points to $116.8K Test

Van de Poppe suggests Bitcoin could test the $116.8K level before resuming its upward trajectory. This potential 1.75% move downward would put approximately $1.63 billion worth of Bitcoin long positions at risk of liquidation, according to CoinGlass data.

The analyst explained that Bitcoin "has taken all the liquidity on the highs and immediately inversed toward the range high resistance," indicating a classic technical pattern where price moves to clear out leveraged positions.

Market Sentiment Remains Optimistic Despite Price Decline

Despite the short-term price weakness, Bitcoin market sentiment continues to show strength. The Crypto Fear and Greed Index dropped only two points to 68, maintaining its position in the "Greed" territory.

Spot Bitcoin exchange-traded funds demonstrated continued institutional interest with their fourth consecutive day of inflows on Monday, recording $178.1 million in net investments according to Farside data.

Long-Term Bull Case Intact According to Analysts

Several market participants maintain a bullish outlook for Bitcoin's longer-term prospects. Crypto trader Rekt Capital previously noted that if Bitcoin can convincingly break above $126,000, the price could move "a lot higher and quickly."

Jan3 founder Samson Mow suggests Bitcoin could see additional upside if Ethereum traders begin rotating profits back into Bitcoin. Mow predicts this rotation could occur once ETH prices reach sufficiently high levels, potentially reversing Ethereum's five-week surge.

Ethereum Competition Creates Market Dynamics

The relationship between Bitcoin and Ethereum continues to influence market dynamics. While some analysts like Mow expect rotation back to Bitcoin, others remain bullish on Ethereum's prospects.

Fundstrat co-founder Tom Lee compared Ethereum's current momentum to "Bitcoin's 2017 moment," suggesting ETH could reach as high as $16,000, representing a 272% increase from current levels around $4,300.

Broader Cryptocurrency Market Performance

The broader cryptocurrency market showed mixed signals alongside Bitcoin's decline. Major altcoins including XRP and Solana experienced more significant losses, dropping 3.94% and 5.90% respectively during the same period.

This divergence in performance highlights the complex dynamics within the cryptocurrency ecosystem, where individual assets can move independently based on specific fundamental and technical factors.

Risk Considerations for Bitcoin Traders

Market participants should consider several risk factors when evaluating Bitcoin's short-term prospects. The potential test of $116.8K represents a critical technical level that could determine near-term price direction.

Large liquidation levels around this price point could create additional volatility as leveraged positions are forced to close. However, continued institutional inflows through ETF products suggest underlying demand remains strong.

The current market structure shows typical characteristics of a consolidation phase, where price action remains volatile while establishing new support and resistance levels. Traders should monitor key technical levels and market sentiment indicators for directional clues.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making investment decisions.

For more Crypto, Web3, Blockchain & AI news visit : www.metamoonmedia.com