Bitcoin Sinks Below $120K as Bearish Momentum Raises Alarm for Potential Drop Toward $108K
Bitcoin’s recent price trajectory has taken a discouraging turn, with the leading cryptocurrency slipping beneath the critical $120,000 threshold. This renewed weakness has prompted traders to brace for a potential retest of the $108,000 support zone—a level last seen during previous pullbacks.
As of Thursday’s U.S. market open, Bitcoin (BTC) edged closer to weekly lows, reflecting a nearly 3% daily decline. Market data revealed that BTC/USD fell through several layers of buyer liquidity, exposing the asset to further downside risk. While some bid support remained between $121,000 and $120,000, it appeared insufficient to counter the rising selling pressure.
According to market analyst Skew, the lack of sustained buyer absorption suggests that the market may soon see an influx of short positions. This sentiment echoes broader concerns that the current bullish momentum has stalled, leaving the door open for bears to take control in the near term.
Meanwhile, proprietary trading indicators from Material Indicators flagged a notable technical development—a third consecutive daily test of support near a key trend line. This repeated testing raises the risk of a breakdown, particularly with little defense showing up below the $120,000 mark.
Order book data from CoinGlass further confirmed the vulnerability of the current price structure. Below the $120,000 level, demand thins out significantly, while resistance above grows more robust, putting added pressure on the price to seek lower ground.
Longer-term charts reinforce the bearish sentiment. Popular trader Roman pointed out a series of bearish divergences and fading momentum on both weekly and monthly timeframes. He noted that although Bitcoin had previously rallied strongly from $107,000 to $124,000, the current setup lacks sufficient strength to maintain those gains. As a result, Roman warned that Bitcoin could be on track to revisit $108,000—a level that increasingly appears as a magnet for price action in the coming weeks.
This outlook aligns with earlier analyses suggesting that any meaningful bullish breakout may be postponed until after October. Until then, traders are preparing for a potentially extended consolidation phase or even deeper corrections.
Technical Indicators Signal Weakness Ahead
Diving deeper into technical signals, Bitcoin has been printing lower highs and struggling to reclaim key moving averages on the daily chart. The RSI (Relative Strength Index) remains in neutral-to-bearish territory, reflecting the lack of upward momentum. Coupled with low trading volume, this points to a market that is hesitant and prone to volatility.
Moreover, the MACD (Moving Average Convergence Divergence) indicator has started to show signs of a bearish crossover, further fueling concerns that sellers may dominate in the short term. Without a significant influx of new buying interest, Bitcoin may continue to slide toward the $108,000 support area.
Why $108,000 is Crucial
The $108,000 level has emerged as a critical psychological and technical support zone. It represents the lower boundary of a trading range that has contained Bitcoin for several weeks. A breakdown below this level could trigger a cascade of stop-loss orders, accelerating the downward move and potentially opening the path to even deeper retracements.
On the flip side, if bulls manage to defend this area with conviction, it could serve as a foundation for a renewed rally. However, given the current market structure and macroeconomic uncertainty, such a scenario appears less likely in the immediate term.
Macro Factors at Play
Beyond technical indicators, macroeconomic factors are also weighing on Bitcoin’s price. Rising interest rates and tighter monetary policy have reduced the appetite for risk assets, including cryptocurrencies. Additionally, geopolitical tensions and regulatory uncertainty continue to dampen investor sentiment, further limiting upside potential in the near term.
Institutional participation, which had been a major driver in Bitcoin’s earlier rallies, has also shown signs of cooling. Lower inflows into crypto-related investment products signal a cautious approach by large players, adding to the bearish undertone.
What Traders Should Watch Next
In the days ahead, traders will be closely monitoring several key levels—primarily the $120,000 support and the $108,000 range low. A sustained break below either could shape the next major move. Additionally, volume spikes and order book imbalances will be critical in determining whether the market is preparing for a bounce or a deeper correction.
Volatility is likely to remain elevated, and caution is advised for both short- and long-term investors. With the absence of strong bullish catalysts in the immediate future, the market may continue to move sideways or drift lower until new momentum emerges.
Could October Bring a Turnaround?
Historically, October has been a favorable month for Bitcoin, often referred to as “Uptober” in crypto circles. However, this year’s setup looks less promising. Analysts argue that the seasonal trend might not repeat itself in 2024 due to prevailing bearish signals and macroeconomic headwinds.
That said, if Bitcoin can stabilize near $108,000 and build a base with increasing volume and institutional support, a late-year recovery remains a possibility. For now, though, caution remains the dominant theme.
Conclusion
Bitcoin’s drop below $120,000 has reignited fears of a deeper correction, with $108,000 emerging as the next critical level to watch. Technical weakness, low volume, and bearish divergences all point to a market in flux. Until strong support is confirmed or macro conditions improve, traders should brace for continued volatility and the potential for further downside movement.
Investors are advised to remain vigilant, manage risk carefully, and avoid overexposure in a market landscape that continues to shift rapidly.