BTC traders still bullish despite the price pullback: Check forecast

Bitcoin, the leading cryptocurrency by market cap, is down by less than 1% in the last 24 hours and is now trading around $121,600 per coin. The cryptocurrency is facing a slight pullback after hitting a new all-time high of $126k earlier this week.

Leading altcoins, Ethereum (ETH) and XRP, followed BTC’s footsteps and faced correction, with both coins closing below their key support levels.

The pullback suggests further downside risks, with the bulls expected to defend the $120k resistance level or face more dips in the coming hours and days. 

Spot Bitcoin ETFs record a strong week

BTC hit a new all-time high earlier this week thanks to strong institutional demand for spot Bitcoin exchange-traded funds (ETFs). This week, Bitcoin ETFs have pulled in $2.72 billion in inflows.

The massive inflow recorded by the ETFs suggests that institutions believe that Bitcoin serves as a digital hedge alongside gold. 

Despite the current pullback, traders remain bullish. In an email to Invezz, Dr. Sean Dawson, head of research at the onchain options platform Derive.xyz, stated that traders are preparing for a significant upside move. Dawson added that,

The analyst added that traders are expecting a near-certain 25 basis point rate cut by the Federal Reserve later this month, with Polymarket odds currently sitting at 90%.

Bitcoin could decline further if the price dips below $120,000 

The BTC/USD 4-hour chart remains bearish and efficient, despite Bitcoin reaching an all-time high of $126k on Monday.

The coin has failed to maintain the momentum since then and has now lost over 2% of its value, retesting the key $120k support level. At the time of writing, BTC is hovering around $121,600.

The Relative Strength Index (RSI) on the 4H chart reads 48, falling from the overbought conditions on Monday, indicating a potential slowdown in its recent rally.

The MACD lines are also close to the neutral zone and could slip into the negative territory, suggesting a bearish bias. 

If the correction continues, BTC risks closing below the $120k resistance and could extend its decline towards the next key support level at $116k. The bulls will likely defend the $116k support, as failure to do so could see BTC drop below $110k. 

However, if the $120k support level holds, Bitcoin could resume its upward momentum and reclaim the first liquidity zone at $124k. An extended rally would see BTC surge toward the record high of $126k