Bitcoin Price Holds Near $122,000 After Recent Pullback
Bitcoin (BTC) stayed close to $122,000 on Wednesday. This followed a 2.6% drop the day before. Investors took profits, making them cautious. A report from K33 suggests Bitcoin may consolidate before its next big move.
Profit-Taking and Market Uncertainty Affect Bitcoin
Bitcoin hit a new all-time high of $126,199 on Monday. But on Tuesday, it fell 2.5% as holders sold to lock in gains. Santiment’s Network Realized Profit/Loss (NPL) metric showed a large spike on Monday and Tuesday. On Wednesday, the spike was the highest since early October. This shows many holders sold at a profit, increasing selling pressure.
Concerns about a US government shutdown, now in its second week, added to market uncertainty. This weighed on risk assets like Bitcoin.
Investors are watching the Federal Open Market Committee (FOMC) meeting minutes due Wednesday. These could cause more price swings in Bitcoin. Federal Reserve Chair Jerome Powell’s speech on Thursday will also be important. It may give clues about future interest rate cuts. This will affect the US Dollar and risk assets.
On-Chain Data Shows Overheated Market and Risk of Consolidation
A K33 report on Tuesday said the market looks temporarily overheated. It warned of a short-term consolidation risk. Last week saw the strongest Bitcoin accumulation this year. About 63,083 BTC were added across US ETFs, the Chicago Mercantile Exchange, and perpetual futures. This surpassed the previous record in May.
The report said this surge happened without clear macroeconomic reasons. It was driven by many long positions as yields rose sharply. Similar past events often marked local market tops. The current setup suggests a risk of short-term consolidation.
QCP Capital said on Wednesday to expect gold to outperform and to buy dips in Bitcoin and risk assets. However, traders should watch for volatility from tariffs and data gaps.
Bitcoin Price Forecast: Support at $120,000 Is Key
Bitcoin reached $126,199 on Monday after a 10% gain last week. But it corrected by 2.67% on Tuesday. On Wednesday, it traded near $122,000.
If Bitcoin falls below $120,000 and closes there, it may drop further to $116,000. The daily Relative Strength Index (RSI) is 63, down from overbought levels on Monday. This suggests bullish momentum may slow and consolidation could happen.
If Bitcoin keeps rising, it could test the all-time high of $126,199 again.
