Bitcoin News Today: Bitcoin Trapped Near $120K as Analysts Warn of 4.3% Drop if 116K Support Fails

Bitcoin’s price has remained in a consolidation phase near $120,000, with analysts flagging the vulnerability of key support levels below $116,000. ShayanMarkets’ technical analysis highlights a critical juncture as the cryptocurrency hovers near its all-time high of $123,000, caught in a narrow range between $116,000 and $120,000 [1]. This equilibrium, marked by balanced buying and selling pressure, suggests the market is awaiting a catalyst to break the stalemate. The current resistance aligns with Fibonacci extension levels (0.5-0.618), amplifying its technical significance. A failure to sustain above $116,000 could trigger a correction toward $111,000, with further bearish momentum likely [1].

On the 4-hour chart, Bitcoin exhibits a bullish flag pattern, a continuation setup that typically follows a sharp move. However, repeated rebounds from $116,000 indicate weakening support. ShayanMarkets warns that this has created a sell-side liquidity pool just below $116,000, raising the risk of a liquidity sweep and bearish breakout. A breakdown could propel the price toward $111,000, aligning with the flag’s lower boundary [1]. On-chain data from Binance’s BTC/USDT liquidation heatmap reinforces this scenario, showing a tug-of-war between two major liquidity clusters: one above $120,000 and another below $116,000. These zones, dense with leveraged futures positions, are prime targets for market makers and smart money to exploit. A move toward either level could spark a cascade of liquidations, intensifying volatility and accelerating price action [1].

Additional analyses from external sources echo these concerns. TradingView traders caution that a breach of $117,000 might accelerate a drop to $111,000 before a potential rebound [2]. Meanwhile, Leap Digital Investments notes that sustaining above $115,000 is crucial to avoiding a deeper correction. Failure to hold this level could initiate a corrective phase targeting $111,000 [3]. The sideways consolidation observed since mid-July, despite a peak at $123,100, underscores investor uncertainty about Bitcoin’s near-term sustainability. Leap Digital Investments emphasizes that $111,000 will serve as a critical test before any recovery attempt [3].

Market participants are closely monitoring $115,000 as a pivot point to prevent further declines. A sustained breakdown below $111,000 could erode confidence in the broader crypto market, potentially spilling over into Ethereum and other altcoins. However, these scenarios remain speculative, as the data reflects analyst forecasts rather than confirmed outcomes. Investors are advised to balance short-term risks with long-term fundamentals while remaining vigilant for volatility spikes once key thresholds are breached [2][3].

Sources:

[1] [Bitcoin Breakdown? BTC Price Analysis Warns of Sharp Drop Below $111K](https://coinmarketcap.com/community/articles/68822871ee5d734e975bb64b/)

[2] [Bitcoin/TetherUS Trade Ideas — BINANCE:BTCUSDT](https://www.tradingview.com/symbols/BTCUSDT/ideas/page-20/)

[3] [Leap Digital Investments: Bitcoin Price Analysis](https://leapdigitalinvestments.com.au/)