Bitcoin bulls pushed toward the $120,000 resistance but lost momentum, pulling back to the $117,000–$118,000 support zone as the broader market followed suit.
Total crypto market capitalisation dropped nearly 6% to $3.94 trillion, slipping below the $4 trillion mark as traders locked in gains after recent highs.
Despite the drawdown, sentiment remained elevated.
The Crypto Fear and Greed Index rose two points to 74, reflecting continued optimism and suggesting that the pullback is still being viewed as a short-term correction within a larger bullish trend.
Altcoins fared no better, with most only managing single-digit profits by late Asian trading hours on Wednesday.
Why is Bitcoin stuck?
Bitcoin remains stuck in a narrow range as conflicting signals emerge across derivatives, spot markets, and macroeconomic expectations.
After briefly climbing above $120,000 following the daily open, Bitcoin faced strong sell-side pressure, triggering a sharp reversal toward the $117,000–$118,000 band.
CoinGlass data showed a rise in liquidation activity, with more than $500 million cleared across the market over the last 24 hours, indicating excessive leverage buildup.
Ask-side liquidity has also thickened around the spot price, suggesting that sellers are stepping in more aggressively near resistance levels.
CoinGlass highlighted that both long and short high-leverage positions are currently “very juicy,” creating conditions ripe for further volatility.
On-chain and market structure indicators show no evidence of a broader trend reversal.
Most analysts were saying this retracement is in line with typical market behaviour following extended rallies.
Illia Otychenko, lead analyst at crypto exchange CEX.IO, described recent price action as a “healthy correction” after recent double-digit gains, adding that daily RSI readings had entered overbought territory, which often prompts short-term profit-taking among traders.
Some of the slowdown is also attributed to traders remaining cautious ahead of the upcoming public address by Federal Reserve Chair Jerome Powell.
With the Fed entering its 10-day blackout period ahead of the next policy meeting, traders are watching closely for any change in tone.
Markets currently price in a 56% probability of a September rate cut, according to the CME FedWatch tool, but further hawkishness could dampen appetite for risk assets.
What’s next for Bitcoin?
Market participants remain split on the short-term trajectory.
Some analysts expect further downside, citing technical rejection at $120,000 and lack of a confirmed breakout.
Michaël van de Poppe called the latest move a “liquidity sweep,” warning that Bitcoin may revisit the lower end of its recent range.
Adding to the outlook, Trader Crypto Virtuos identified the $113,000 level as a possible short-term target based on Fibonacci retracement levels.
$BTC has been moving sideways for a bit, so here’s a short update.
I think, we might see a short retrace/correction. Could be 6/7% and that could push the price to the .618 level which is 113K, after that, we could see another push upwards.
I’m pretty optimistic about this
A 6–7% correction to that zone would align with past consolidation patterns and may offer renewed buying opportunities, according to the trader.
Others remain confident that the current pause is a consolidation phase within a broader uptrend.
Experts at analytics firm Bitcoin Vector argued that on-chain fundamentals remain intact, with the Bitcoin Fundamental Index still showing strong network growth and liquidity.
“Momentum has cooled, but structure and fundamentals remain solid,” the firm wrote, adding that price is merely lagging behind the underlying data.
CoinGlass’ bull market peak indicators are also flashing signs that there is still room for growth.
None of the 30 top-cycle signals tracked by the platform have been triggered.
Analysts referred to key metrics such as Pi Cycle Top, MVRV, RSI, and Reserve Risk, which were well below levels typically associated with major market tops.
See below.
📊 INSIGHT: 0 out of 30 top signals have triggered on CoinGlass’s Bitcoin Bull Market Peak Dashboard.
Long-term indicators like Pi Cycle Top, MVRV, RSI and Reserve Risk say we’re not there yet.
Historically, the more boxes this list checks, the closer we get to a blow-off top.
As a result, Bitcoin continues to hold a bullish structure, consolidating between $116,500 and $120,000 since mid-July.
Bitcoin vector explained in a separate post.
BTC is holding bullish structure despite compression near $117K–$119K.
🔸Momentum is fading, and that can erode price
🔸But structure remains intact because fundamentals are still strong.
No breakdown. No breakout. Just waiting for ignition.
The flagship crypto is “waiting for ignition,” with a breakout likely once momentum realigns with fundamentals, it added.
When writing, Bitcoin was hovering around $118,000, down 1% in the past 24 hours.
Altcoins mirror Bitcoin’s downturn
With Bitcoin continuing to trade sideways over the past 24 hours, the broader altcoin market fell nearly 4.2%, as the benchmark cryptocurrency’s lacklustre performance and short-term profit taking weighed on investor sentiment.
Ethereum (ETH), the bellweather asset that drives altcoin rallies, had slipped 2.5% over the day, perched at $3,600 when writing.
Other large-cap coins like Ripple (XRP), Solana (SOL), Dogecoin (DOGE) and Cardano (ADA) faced steeper losses ranging between 6-8%.
This comes as the Altcoin Season Index reading, a closely watched metric to track the performance of top altcoins against BTC, fell back to 45 from 55 reached just two days ago.
Despite this, Bitcoin’s market dominance has continued to drop to 60.7%, while Ethereum’s market share rallied to 11.3% from 9.1% recorded at the start of the month.
Some market watchers speculate that BTC’s market dominance could be poised for a deeper correction, which could jumpstart a full-fledged altcoin season
According to crypto analyst Ted, a double-top pattern has formed on the Bitcoin dominance daily chart, a bearish structure that suggests Bitcoin’s relative strength may have reached its peak this cycle.
While a short-term relief bounce is possible, the pattern typically precedes further downside, potentially opening the door for capital rotation into altcoins.
Bitcoin dominance. Source: Ted Pillows.
“Maybe a fake pump in the coming days, before further dump. Altseason is coming?”, the analyst wrote.
When Bitcoin dominance fades, capital often rotates into higher-risk assets, allowing altcoins to outperform as traders seek greater upside during periods of market expansion.
Most top altcoins had trimmed their weekly gains, with only a handful like Pump.fun (PUMP), Vaulta (A), and Pudgy Penguins (PENGU) still holding on to minor intraday profits between 4-6%.
Source: CoinMarketCap
The post Bitcoin momentum weakens at $120K, PENGU among the few altcoins holding in green appeared first on Invezz
