Bitcoin surged to a fresh all-time high of $124,500 just hours ago, but the celebration was short-lived as the price quickly retraced to the $121,500 level. The sudden pullback has split market opinion: some analysts interpret the drop as a sign of waning momentum, while others see it as a healthy pause before another breakout attempt.
Adding to the intrigue, key data from CryptoQuant reveals that BTC volatility — measured by the 30-day Price High & Low metric — has compressed to its lowest point in two years. This metric tracks the range between Bitcoin’s rolling 30-day high and low, and its current tight squeeze suggests a rare balance between supply and demand. Liquidity has been clustering above local highs near $120K and below recent lows around $113K, creating a coiled-spring effect in the price structure.
Adler explains that such compression typically reflects a balance between supply and demand and a period of low realized volatility. In this phase, liquidity tends to concentrate just above local highs, currently around $120,000, and just below local lows, near $113,000. This creates a situation where price movement is contained within a narrow band, with traders positioning themselves on both sides in anticipation of the next breakout.
The coming days will be critical in determining Bitcoin’s short-term structure. If BTC can break above the $120K–$124K zone, it could trigger another leg higher in its uptrend. However, a breakdown below $113K would increase the risk of a deeper correction, potentially shifting market sentiment.
On the 8-hour chart, Bitcoin (BTC) is trading at $121,596, down slightly by 0.14% after hitting $122,609 earlier in the session. The move comes just a day after BTC briefly broke above the key $123,217 resistance level, approaching the $124,000 psychological barrier before pulling back. This zone remains the most significant obstacle for bulls, as it has capped upward moves multiple times.
Price action shows BTC maintaining a bullish structure above its major moving averages — the 50 SMA ($116,948), 100 SMA ($117,653), and 200 SMA ($112,495). This alignment signals continued strength in the medium term, with the 50 SMA acting as immediate dynamic support.
The repeated tests of the $123K area suggest that market liquidity is heavily concentrated here. A decisive breakout and sustained close above $124K would likely trigger momentum buying and open the door to new all-time highs. Conversely, a failure to reclaim $123K could lead to renewed selling pressure, with initial support at $120K and deeper support near the $117K–$118K range.
Featured image from Dall-E, chart from TradingView
