Bitcoin (BTC) was down 3.7% from its $126,000 all-time high and could revisit the $118,000 level over the next few days, but data suggested that prolonged trading below this level could be short‑lived.
Bitcoin could drop to $118,000 first
Bitcoin price was trading at $121,300 on Friday, after posting moderate losses over the last 24 hours, data from Cointelegraph Markets Pro and TradingView shows.
While the macro setup remains bullish, analysts agree that the BTC/USD pair could first drop toward $118,000‑$120,000 before resuming its uptrend.
Related:Bitcoin Mayer Multiple: BTC price can hit $180K before being ‘overbought’
“Here we go with the shakeouts to both sides,” said popular analyst Stockmoney Lizards, adding that such price action is normal after Bitcoin hits new all‑time highs.
“This flush should end soon, around $118,000‑$119,000, then higher,” the analyst added.
“It seems like $BTC wants to retest the $118,000‑$120,000 support level,” fellow analyst Ted Pillows said in a Friday post on X.
The analyst noted that strong bids are present on exchanges at this level, suggesting that the BTC/USD pair could potentially drop toward this level.
“After that, a rally is expected if buyers step in.”
Meanwhile, Glassnode’s Cost Basis Distribution Heatmap highlighted support near $117,000, where roughly 190,000 BTC were last acquired.
MN Capital founder Michael van de Poppe had a different view, however, arguing that Bitcoin has already had its correction following its flash drop to $119,700 during the late New York trading session on Thursday.
“It’s ready to continue toward new all‑time highs.”
Similarly, AlphaBTC stated that the price has now cleared liquidity on the lower side, down to $118,000, with traders now focusing on liquidity above $126,000.
Bitcoin futures OI drops by $4.1 billion
Bitcoin’s futures open interest (OI) experienced a $4.1 billion drop as BTC price fell to $119,700 from $126,000, data from CoinGlass shows.
This can be considered a healthy market reset, as it reflects the liquidation of overleveraged positions, reducing market euphoria.
On‑chain data provider Glassnode said that while the OI has dropped slightly from its all‑time high, it “remains elevated as both longs and shorts are being whipsawed by sharp price swings,” adding:
“The market is undergoing a leverage reset, with volatility flushing out excess positioning on both sides.”
High OI often indicates over‑leveraged trading, which can amplify volatility. When a slight price drop triggers a significant number of liquidations, it clears out speculative positions, stabilizing the market.