Due to the aggressive trading actions of certain traders, Bitcoin prices are at risk of falling sign

After a decline of approximately 4% from historical highs, the price of Bitcoin is currently seeking new support levels. Analysts suggest that potential bottom levels might be around $114,000. At the same time, traders are actively increasing liquidity to cope with future market fluctuations, which means investors need to remain vigilant about short-term trends.

Key points:

● The price of Bitcoin continued to fall by more than 4% within a few hours.

● Liquidity has begun to recover, increasing the likelihood of short-term volatility.

● Price forecasts indicate that BTC could reach a local bottom at around $114,000.

Due to traders’ expectations of further price fluctuations in BTC, it will be difficult to break through $122,000 on Wednesday.

One-hour chart of BTC/USD. Source: Cointelegraph/TradingView

Bitcoin has been consolidating after a sharp drop from historical highs.

Data from Cointelegraph Markets Pro and TradingView shows that BTC/USD began to stabilize after a sudden 4.2% decline the previous day.

Given that Bitcoin has continuously reached new highs without showing strong upward momentum, this phenomenon is expected to continue.

According to Cointelegraph, the rapid increase in open interest in the derivatives market has increased concerns that Bitcoin may sell off recent gains.

Futures positions in Bitcoin on exchanges (screenshot). Source: CoinGlass

As corrections occurred, trader Skew commented in his X post on Tuesday: “To be honest, price action has been very effective, resulting in relatively low volatility so far.”

Skew also noticed the “predatory” behavior of large traders in the exchange order book.

However, overnight, liquidity began to return to the market. Data from CoinGlass shows that both buying and selling volumes have increased as of the time of writing this article.

BTC settlement heatmap. Source: CoinGlass

Skew believes this could lead to a “consolidation period.”

The support level for BTC prices has once again become a focus at $114,000.

Others are looking into where BTC/USD might establish a reliable local bottom, warning that this could be significantly lower than current spot prices.

Trader ZYN reported on X: “There isn’t much support between $121,000 and $120,000. This means that if selling increases, prices could fall rapidly.”

But around the price of slightly below $117,000, there was a recent purchase of nearly 190,000 BTC. This represents a large group of buyers in recent times.

Heatmap showing the cost base distribution of Bitcoin. Source: ZYN/X

ZYN is using the cost base of recent buyers to predict where demand might support prices.

“If we look back to that range, then in such areas, demand usually becomes apparent. Strong buyers will defend their entry opportunities, and new capital will also get involved. In short: the resistance level at $121,000 is weak, but a bottom at $117,000 is forming,” he concluded.

Material Indicators uses its proprietary trading signals to identify a support level of $120,000. However, it suggests that a stronger rebound could occur around $114,000, which is close to Bitcoin’s 50-day simple moving average.

BTC/USD daily chart. Source: Material Indicators/X

For cryptocurrency traders, analysts, and entrepreneurs like Michaël van de Poppe, the next buying zone has expanded to $118,000.

He explained, “Bitcoin has reached a record high, and this is often seen as a trigger for people to take profits.”

BTC/USDT daily chart, including volume and RSI data. Source: Michael van de Poppe/X

“There’s a slight correction, and we’re getting closer to the potential buying area that interests me personally.”