Bitcoin’s recent retreat has sparked concerns of a deeper correction in the crypto markets, as the leading digital asset breaks below a critical bullish trendline on both weekly and daily charts.

Technical Indicators Warn of Weakening Momentum

Bitcoin (BTC) has fallen more than 7% since reaching a new all-time high above $124,000 last Thursday. With bullish momentum fading, the cryptocurrency’s price is now hovering below a key Fibonacci resistance level at $122,056 — known as the golden ratio.

This level also coincides with a long-term diagonal resistance trendline linking Bitcoin’s previous bull market peaks in 2017 and 2021. The inability to maintain price action above this level signals potential exhaustion among buyers.

Bitcoin’s weekly chart highlights resistance near the Fibonacci golden ratio and a stalled bullish breakout. (TradingView/CoinDesk)

The weekly stochastic oscillator — a momentum indicator — has also started turning lower from readings above 80. This downward move further validates the risk of a price correction as momentum weakens at elevated levels.

Daily Trendline Break Confirms Bearish Pressure

A closer look at the daily chart reveals another troubling sign: Bitcoin’s most recent candle broke below the ascending trendline stretching from the lows recorded in April. This breach follows Friday’s bearish outside-day candlestick pattern, often interpreted as a shift in market sentiment favoring sellers.

The daily chart shows BTC snapping the April trendline, increasing bearish odds. (TradingView)

From a technical perspective, these developments suggest a growing downside bias, with short-term support located at $111,982 — the level from which Bitcoin rallied on August 3. A sustained drop below this threshold could draw further attention to the 200-day simple moving average (SMA), currently positioned near $100,000 — a psychologically and technically significant area.

However, if bulls manage to reclaim levels above $118,600 — last Sunday’s high — it could weaken the bearish arguments and revive short-term optimism.

Related: Cardano Bull Setup Points to December Rally

• Key Resistance Levels: $120,000, $122,056 (Fibonacci golden ratio), $124,429
• Key Support Zones: $111,982, $105,295 (31.8% Fib retracement between April and August highs), $100,000 (200-day SMA)

As Bitcoin continues to trade near major technical inflection points, traders and investors are closely monitoring chart patterns and momentum indicators to gauge the asset’s next move.