Bitcoin’s recent price action has been a dramatic rollercoaster. After surging to a fresh all-time high, the cryptocurrency abruptly retraced back to the price levels it held before last week’s pump. This sharp reversal signals that bearish forces are regaining control of the market, pushing sellers to the forefront once again. Crypto analyst Melikatrader has weighed in with a careful technical breakdown, highlighting that Bitcoin’s break below its lower trendline signals the onset of mounting downward pressure. From this critical juncture, the analyst outlines two potential rebound scenarios that ultimately suggest another crash after a temporary recovery.
Breaking Down the Recent Price Movement
Bitcoin had been trading within an ascending channel characterized by higher highs and higher lows, reflecting a generally bullish trend. However, the recent break below the channel’s lower trendline is a significant technical warning. This break suggests that the momentum favoring buyers is weakening, and sellers are starting to assert dominance. The initial all-time high, followed by a rapid pullback, indicates a volatile market environment where profit-taking and supply may outpace fresh buying interest.
The fundamental trigger behind this shift appears to be the market reacting to a supply zone located between approximately $118,000 and just under $120,000. Whenever prices near this zone, sellers accumulate, providing strong resistance that thwarts further upward movement. This resistance has created two distinct paths in which Bitcoin’s price action is likely to unfold, according to Melikatrader’s analysis.
Scenario One: Rally to $118,000 Followed by Sharp Reversal
In the first scenario, Bitcoin attempts a rebound and rallies back into the supply zone around $118,000. This rally may initially appear convincing, luring in fresh buyers as hopes for a sustained recovery grow. However, the key here is that this $118,000 level represents a major supply point where aggressive seller activity can suddenly intensify. Once the price touches or slightly breaches this zone, sellers are expected to overwhelm the market, triggering a sharp reversal.
This selling pressure would likely cause Bitcoin to tumble back down, undoing the gains made during the attempted rally. The analyst pinpoints the probable bottom of this decline near $115,800 — a level that previously saw substantial buying interest and demand in the preceding month. This historical demand could act as a floor, potentially halting further collapse and setting the stage for the next recovery phase.
Scenario Two: Bounce Just Under $120,000, Then Decline
The second scenario paints a similar picture, although the rebound pushes slightly higher, nearing just under $120,000. This level still functions as a strong supply zone where selling pressure is expected to mount. Like the first scenario, the approach towards this resistance may attract buyers, but the momentum may falter quickly as sellers step in to lock in profits and put downward pressure on the price.
After hitting this resistance, Bitcoin would again face a steep decline, likely retreating to the same $115,800 support level. The repetition of this bottom reinforces its technical importance as a key support zone, where buyers previously defended the price and could do so again if sellers overextend.
What These Scenarios Mean for Bitcoin Traders
- Bearish control is strengthening: The break of the lower trendline marks a shift from bullish to bearish dominance, increasing the risk of further downside.
- Supply zones create critical resistance: Both $118,000 and just below $120,000 are crucial supply regions where sellers are likely to unload BTC and stem upward advances.
- Watch the $115,800 support level: This prior demand area is the most plausible floor where Bitcoin could stabilize and potentially reverse higher.
- Volatility remains high: The rapid moves to new highs followed by sharp retracements suggest traders should expect significant price swings and exercise caution.
Long-Term Outlook Amidst Short-Term Volatility
While the immediate technical setup points to a challenging period ahead with potential sell-offs after temporary rallies, longer-term indicators remain mixed but not outright bearish. Other analysts emphasize that Bitcoin’s ongoing interest from institutional investors, ETF inflows, and macro factors like positive inflation data provide underlying strength. Some bullish commentators even project new all-time highs in the scope of coming months aiming toward levels between $120,000 to $150,000, provided Bitcoin manages to hold vital support zones.
Nonetheless, the short-term landscape is clearly dominated by sellers. The market seems caught in a tug-of-war between hope for continued gains and the reality of profit-taking and cautious positioning. This dynamic could lead to a “false recovery” where prices briefly advance into known resistance only to collapse once again, exactly as Melikatrader’s scenarios predict.
Key Takeaway
Bitcoin’s recent price action underscores how volatile and uncertain the market remains despite the dramatic rally to all-time highs. The break below the lower trendline signals rising bearish pressure that is likely to manifest in mounting selling activity. Both plausible rebound scenarios anticipate a rally into a major supply zone near $118,000 to just under $120,000, followed by a sharp reversal down to support around $115,800. Traders and investors should closely monitor these levels for signs of whether Bitcoin can hold its ground or fall deeper. While a meaningful recovery is possible in the medium term, the immediate outlook calls for caution amid aggressive seller behavior and technical resistance.
