Bitcoin Plunge Warning: How Low Can BTC Price Go After $123K Peak?

The cryptocurrency market is abuzz with speculation as Bitcoin (BTC) faces renewed pressure. After a remarkable run, whispers among traders suggest that the recent peak around $123,000 might have been a local top, signaling a potential reversal. Is your portfolio prepared for a significant shift in the Bitcoin price trajectory? This comprehensive analysis delves into the critical indicators and expert opinions shaping the current outlook, helping you navigate the turbulent waters of potential downside.

Bitcoin Price Under Pressure: The $115,000 Crossroads

Bitcoin’s journey has hit a crucial juncture, with the digital asset recently dipping below the significant $115,000 mark for the first time since July 25. This move comes after several weeks of failed attempts to break past the $120,000 resistance level, casting doubt on the immediate upward momentum of the Bitcoin price. Many market participants are now closely watching the $115,000 support, which analyst Michaël van de Poppe highlighted as vital for maintaining the broader uptrend.

According to his analysis, a sustained drop below $115,600 could trigger a wave of long-side liquidations. Such an event would likely push the price further down, potentially towards the $110,000–$112,000 range. Data from leading market platforms corroborates this concern, showing that Friday’s intraday low of $114,100 was accompanied by over $172 million in long BTC liquidations. This reinforces the sensitivity of current support levels. If the $116,000 level isn’t quickly reclaimed, the odds of a deeper correction to $104,000 increase considerably.

Decoding Bearish Signals: What the BTC Price Charts Reveal

Adding to the short-term bearish sentiment, the weekly chart for BTC price is flashing a classic bearish divergence. This technical pattern occurs when the price forms higher highs, but a momentum indicator, such as the Relative Strength Index (RSI), forms lower highs. This discrepancy suggests that the underlying bullish momentum is weakening, even as the price continues to ascend.

Here’s a breakdown of the bearish divergence signals:

• Weekly RSI Divergence: While Bitcoin’s price has recorded higher highs in recent months, the weekly RSI has consistently shown lower highs. This divergence is a strong warning sign, historically preceding significant pullbacks.
• Historical Precedent: A similar setup was observed before the 2021 market top, which led to a substantial correction. If history serves as a guide, Bitcoin could retrace towards its 50-week Exponential Moving Average (EMA), currently hovering near $92,000. This trendline has historically acted as robust support during previous bull market corrections, making it a logical target for a mid-cycle retrace.
• Monthly Chart Confirmation: Crypto Trader AlejandroBTC also noted a similar divergence on the monthly chart, specifically a triple bearish divergence on the monthly RSI. He commented, “Bitcoin is flashing a triple bearish divergence on the monthly RSI. It’s the kind of setup that ends cycles,” implying that the current cycle might be nearing its conclusion.

These technical indicators collectively paint a cautious picture for the immediate future of the BTC price.

Understanding Bitcoin Correction: Historical Patterns and NUPL Warnings

Beyond technical chart patterns, fundamental on-chain metrics are also sounding alarms about a potential Bitcoin correction. The Net Unrealized Profit/Loss (NUPL) metric is a key indicator that tracks the aggregate profit or loss of all coins in circulation. Currently, NUPL resides within the 0.5–0.6 zone, a range historically associated with local market tops.

The significance of NUPL at this level is profound:

• Increased Profit-Taking: With over 92% of the Bitcoin supply currently in profit at prevailing prices, the incentive for profit-taking increases significantly. This elevated unrealized profit often leads to an increase in sell-side pressure as investors lock in gains.
• Past Precedents: Similar NUPL setups in the past, specifically in 2020, March 2024, and January 2025, preceded sharp price corrections. These historical instances raise the possibility of analogous pullbacks occurring in the coming months, potentially in August.

While these signals do not guarantee a crash, they strongly suggest that the market is entering a phase where caution is warranted, and a significant Bitcoin correction is a tangible risk based on historical data.

Navigating the Crypto Market Analysis: Bullish Counterpoints and Future Outlook

Despite the accumulating bearish signals, it’s crucial to consider the broader crypto market analysis, which also includes optimistic perspectives. Not all indicators point to an imminent collapse, and some analysts maintain a bullish long-term outlook for Bitcoin.

Here’s a look at the counter-arguments:

• No Overheating Signs: CoinGlass’s 30 bull market peak indicators suggest that Bitcoin is not yet showing signs of overheating. This comprehensive set of metrics, designed to identify euphoric market conditions, indicates that there might still be room for upward movement.
• Higher Price Targets: Some analysts anticipate that Bitcoin could still reach $138,000 or even $150,000 before a cycle top. These bullish forecasts often project that Bitcoin has at least three more months left in its current bull cycle before a significant peak is reached.
• Long-Term Fundamentals: Proponents of Bitcoin’s long-term growth often point to increasing institutional adoption, limited supply, and its role as a hedge against inflation as ongoing drivers that could propel its price higher, even after short-term corrections.

This dual perspective highlights the complexity of the current market, where short-term technical warnings clash with long-term bullish convictions. A thorough crypto market analysis requires balancing these opposing views.

Forecasting Bitcoin’s Path: Where Does the Bitcoin Forecast Lead?

The current market presents a compelling dichotomy for the Bitcoin forecast. On one hand, clear technical and on-chain indicators suggest waning momentum and increased risk of a significant correction, potentially towards the $92,000 mark. The bearish divergence on both weekly and monthly charts, coupled with the NUPL metric signaling historical local tops, paints a cautious picture for the near term.

On the other hand, some analysts and indicators suggest that the bull market is far from over, with higher price targets still in play before a true cycle peak. The market is not yet showing the classic signs of euphoria that often precede major tops, leaving room for further upside.

Key Takeaways for Your Strategy:

• Monitor Key Support: The $115,000 and $110,000–$112,000 levels are critical. A break below these could confirm a deeper downturn.
• Watch for Confirmation: Observe if the 50-week EMA around $92,000 acts as strong support if prices continue to fall.
• Consider Profit-Taking: With a high percentage of supply in profit, increased volatility due to profit-taking is a real possibility.
• Stay Informed: The market remains dynamic. Keep an eye on both technical and on-chain metrics, as well as broader macroeconomic factors.

Ultimately, the path of Bitcoin remains uncertain in the short term. While a significant pullback is a distinct possibility, the long-term outlook continues to draw strong support from many corners of the market. Investors and traders should conduct their own thorough research and consider their risk tolerance before making any decisions in this volatile environment.