Bitcoin Drops 38% After New All-Time High

Coin WorldFriday, May 23, 2025 8:16 pm ET
2min read

Bitcoin has recently shown a significant drop in momentum, decreasing by 38% after reaching a new all-time high. This slowdown comes after Bitcoin broke its previous record, surpassing the $110,000 mark. The breakout was seen as a major milestone, sparking optimism across the crypto market as bulls took control. However, the rally's momentum has since cooled, which is a common occurrence after reaching new highs. Historically, Bitcoin often consolidates or retraces shortly after breaching all-time high levels, allowing the market to reset before continuing its upward trend.

Despite the slowdown, this consolidation phase is not necessarily a bearish signal. It may reflect healthy market behavior, giving participants time to reposition and reinforcing the foundation for a sustained move higher. As long as Bitcoin holds above key support levels near $105,000, analysts remain confident in the broader bullish

. The next move for Bitcoin could be decisive, as it enters price discovery mode. Whether this consolidation leads to an impulsive rally toward $120,000 or a short-term retrace remains to be seen.

Bitcoin is currently facing both macroeconomic headwinds and growing investor optimism. While fears of an impending recession and tighter financial conditions continue to dominate headlines, Bitcoin’s price action tells a different story—one of strength and resilience. Bitcoin has steadily climbed higher despite rising bond yields, weakening equity markets, and widespread uncertainty, highlighting its evolving role as a hedge against traditional market instability. For this bullish narrative to hold, Bitcoin must decisively break above the $115,000 level. Doing so would confirm the start of a new impulsive leg upward and potentially attract more institutional capital as the asset enters full price discovery mode.

According to top analyst Axel Adler, the current rally has naturally decelerated, with momentum slowing by 38% following the all-time high breakout. Adler explains this as a “technical cooldown,” a normal pattern where the market consolidates or pauses after reaching major milestones. This “breather” allows leveraged positions to unwind, liquidity to reset, and investor sentiment to stabilize before a potential next leg higher. Despite macro concerns, the price structure remains firmly bullish, and short-term consolidation may ultimately strengthen the foundation for another surge. If Bitcoin can maintain current levels and absorb overhead resistance, the path toward $120,000 could come sooner than expected.

The 4-hour chart for Bitcoin reveals a strong uptrend, with price currently consolidating around $111,000 after reaching a new all-time high at $111,356. Price action remains bullish, holding above key support levels at $103,600 and $100,000. This structure indicates a healthy continuation pattern, where Bitcoin is taking a breather after an explosive rally from below $100,000. Volume has tapered slightly, supporting the insight that momentum has cooled by 38%—a normal pause after reaching new highs. Moving averages are sharply upward-sloping, reflecting strong bullish momentum and wide separation from longer-term trends.

The current consolidation zone resembles a flag or

formation, which typically precedes another leg up if buyers step in with volume. However, traders should monitor any sharp drop below $107,000, which would signal fading momentum and increase the risk of a correction toward the $103,600 support. All eyes remain on Bitcoin’s behavior at the $115,000 barrier—a critical mark that could define whether this rally has more fuel or if a correction is due.