Bitcoin News Today: Bitcoin Drops 4% to $118,250 After New All-Time High

Bitcoin has recently hit a new all-time high, followed by a steep correction that brought the asset down to $118,250. Analysis suggests this drop may be part of a corrective phase, with the STH Unrealized Profit chart indicating a potential rally toward $136,000. The worst-case scenario places Bitcoin back in the accumulation zone around $101,000.

Despite reaching a new high of $123,000, data showed that Bitcoin’s local top may not be in yet. One major factor pointing to further upside is the BTC’s STH Relative Unrealized Profit metric. This indicator divides market behavior into three zones: neutral, heated, and overheated. Historically, local tops formed when this metric entered the heated range, such as in January and April. However, despite its recent rally, Bitcoin has remained below the heated zone, indicating further room for growth. Additionally, the Volume-Weighted Average Price (VWAP) liquidity chart confirms this bullish bias, as the price remains above the VWAP line.

Bitcoin is on day 12 of its current expansion cycle, according to Bitcoin Vector’s Optimal Signal indicator. Previous rallies lasted thirty days each, and this model shows expansion phases typically last 15–30 days. That leaves up to 18 days for upside continuation—if BTC mirrors previous patterns. With these conditions in place, analysts have analyzed where Bitcoin might head next, if bullish pressure continues, or if the bears regain control.

According to Glassnode’s Short-Term Holder Cost Basis Model, BTC could rally toward $136,000. This $136,000 level aligns with the +2 standard deviation band—also known as the heated region—which has historically preceded market corrections. However, if Bitcoin fails to gain upward momentum and continues its descent, two critical support zones come into play. The first is between $101,000 and $109,000, a region that previously acted as an accumulation zone. The second sits lower, between $93,000 and $97,000. If BTC falls into the first cluster and fails to bounce meaningfully, a drop toward the second support band becomes more likely, with Bitcoin potentially losing the $100,000 level.

Bitcoin has experienced a significant surge, rising by 39% over the past three months. This rally has sparked discussions among analysts and investors about the potential for a multi-week rally ahead. Several clues suggest that Bitcoin's price could continue to climb in the near future. One key factor is the increasing acceptance and integration of cryptocurrencies into mainstream financial systems. The U.S. House of Representatives is set to pass a series of crypto-related bills, which could further legitimize Bitcoin and other digital assets, driving up their prices.

Another indicator of a potential rally is the recent performance of Bitcoin and other cryptocurrencies. Bitcoin has blasted to a fresh all-time high above $120,000, while Ethereum has held steady over $3,000. This rally has been driven by a combination of factors, including increased institutional investment, growing adoption by retailers and businesses, and positive regulatory developments. Analysts have noted that the crypto market is currently in a "buy on dip" phase, after being a "sell on rise" market for the past 10 months. This shift in market sentiment could indicate that investors are more confident in the long-term prospects of Bitcoin and other cryptocurrencies.

However, it is important to note that the crypto market is still highly volatile and subject to sudden price swings. While the current indicators suggest a potential multi-week rally, investors should remain cautious and be prepared for the possibility of a market correction. It is also worth noting that the crypto market is still relatively new and unregulated, which could pose risks for investors. As such, it is important for investors to do their own research and consult with financial advisors before making any investment decisions.