Bitcoin Pulls Back After Record Run — Bulls Defend $120K Support || Oct 8, 2025
Largest leverage flush since August resets momentum as traders eye key rebound zone
🪙 Crypto Market Overview
Bitcoin and major U.S. indices staged a broad correction on Tuesday, pausing after multiple sessions of strong gains. BTC slipped a few percent, marking its largest single-day leverage flush since August 26th, as excess long positions were cleared from the system.
Despite the drop, the move appears to be a healthy shakeout rather than a structural reversal. To maintain bullish momentum, Bitcoin now needs to stabilize and bounce from the 120,000 USD area — failure to do so could open the door to a deeper retracement toward 117,000 USD.
The Nasdaq 100 also saw profit-taking, reflecting a broader cooling in risk sentiment. Technical sell signals are emerging there as well, adding short-term pressure to correlated assets like crypto.
📊 Technical Picture
Bitcoin’s recent rejection from 126,000 USD perfectly aligns with a multi-year trendline that has capped several major rallies in past cycles. Historically, such rejections often trigger 10,000 USD pullbacks, placing 116,000–118,000 USD as a logical downside target zone.
However, the current setup also shows signs of early stabilization. Multiple daily closes above 121,800 USD would signal that the worst may be over for this correction.
From an Elliott Wave perspective, the fourth corrective wave appears to be in motion. Once complete, the next impulsive leg higher (Wave 5) could resume the broader uptrend toward fresh highs.
🔀 Two Possible Paths
Rebound Scenario:
If BTC can hold above 120,500 USD — a level tied to yesterday’s dormant whale wallet reactivation — a sharp rebound could unfold as short positions build up.Deeper Correction:
A sustained break below 120K would increase the likelihood of a slide toward 117K–116K, matching the 50% Fibonacci retracement and typical “whale capture” range.
🌐 Broader Market Context
On-chain data shows that a large dormant Bitcoin wallet moved coins for the first time this year, coinciding with yesterday’s local lows — possibly signaling anticipation of a bigger move ahead.
The percentage of BTC supply in profit briefly hit 100% before dipping slightly, suggesting that a deeper reset may be required before the next major rally.
Elsewhere, USDT Market Cap dominance has reversed its earlier bullish divergence, implying that crypto assets may continue to outperform if that trend persists.
Short interest is building according to Hyblockcapital, which often precedes short squeezes once selling momentum fades.
🎯 Strategy Outlook
Short-Term (Days): Long bias remains intact. Reclaiming 121.8K+ would confirm stabilization; deeper dip risk extends to 117K.
Medium-Term (Weeks): Structure remains bullish above 115K; next momentum pivot near 126K.
Long-Term (Months): Broader cycle target toward 230K remains valid unless 72K fails.
🧭 Strategy Notes
Correction largely mechanical after leverage buildup.
Watch 121.8K for confirmation of recovery.
Dormant whale movement suggests big players positioning for next phase.
Broader risk-off tone from equities could limit near-term upside, but trend intact.
🔑 Key Takeaways
BTC and U.S. indices see broad profit-taking and leverage flush
Largest single-day liquidation since August 26th resets froth
Support zones: 120.5K → 117K
Elliott Wave analysis: Wave 4 correction likely in progress
Whale and on-chain data hint that the next leg up may follow soon
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