Key Takeaways:
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After reaching unprecedented peaks above $125,000, Bitcoin has begun a downward adjustment.
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Bitcoin’s price fluctuated on Sunday as traders looked for potential support levels.
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Attention is turning to institutional investors amidst rising discussions of Bitcoin as a hedge against currency devaluation.
Bitcoin (BTC) saw renewed price swings as the weekly trading session neared its close on Sunday, triggered by a price correction from its recent all-time highs.
Analyzing the Dip: Bitcoin Could Fall 4%
Data gathered from Cointelegraph Markets Pro and TradingView indicates that the BTC/USD pair retreated below the $123,000 mark.
Earlier in the day, Bitcoin surged to new record highs, surpassing $125,000, driven by activity in the derivatives market during an unusual weekend trading session.
Commenting on the recent price behavior, well-known trader Skew cautioned that this upward movement could be a trap for those taking long positions.
“Short sellers are adding to their positions here,” he noted on X, referring to traders trying to profit from a price decline at the peak.
“Shorts are being initiated under the assumption that the weekend surge is misleading.”
Information from CoinGlass shows liquidity being accessed on both sides of the price on exchange order books.
Typically, crypto market observers consider weekend price changes, whether upward or downward, as unreliable signals of future price direction due to reduced trading activity.
Regarding the potential bottom of the retracement, trader CrypNuevo is watching the 50-period exponential moving average (EMA) on four-hour charts, which is currently slightly above $118,000.
“Looking ahead, I anticipate a possible retest of the 4h50EMA – it’s extended, and similar price action in the past has seen such retests,” he explained in a thread on X.
“Following that, we should witness a fresh upward trend. Therefore, I’m still leaning towards long positions over shorts from the 4h50EMA.”
Rekt Capital, a well-known trader and analyst, also used historical patterns to project Bitcoin’s future price trajectory. He suggested that breaking through $124,000 decisively may take some time.
“The rejection from around $124k on the initial attempt in this uptrend shouldn’t come as a surprise. In fact, the last time Bitcoin faced resistance at $124k, it resulted in a -13% correction,” he stated.
“Bitcoin needs to demonstrate that this $124k resistance is weakening as a point of rejection. Any smaller dip or pullback from here would achieve that.”
Rekt Capital further mentioned that BTC/USD could decline by as much as 4% and still maintain its weekly upward trend.
The “Debasement Trade” Narrative Gains Momentum
Optimistic perspectives, on the other hand, emphasized the presence of institutional involvement.
Caleb Franzen, founder of Cubic Analytics, a financial research platform, observed that the lack of significant Bitcoin price pullbacks indicates strong demand.
“When I see this type of short-term price movement, with only minor pullbacks, large upward spikes, and sustained buying pressure, I see institutional activity,” he posted in a series of updates on X.
Commentators in mainstream finance are pointing to Bitcoin’s role in the “debasement trade,” where investors seek to protect their assets against the eroding value of traditional currencies.
Digital #Gold – aka #Bitcoin – is following its analogue counterpart, hitting a new record high >$125k – a milestone in the ongoing debasement trade, as investors seek protection from currency devaluation. pic.twitter.com/KHjeet5EW8
— Holger Zschaepitz (@Schuldensuehner) October 5, 2025
Cointelegraph previously reported on this trend, a term first used by JPMorgan analysts earlier in the year.
This article does not constitute financial advice. Investing and trading involve risks, and individuals should conduct their own due diligence before making any decisions.