Veteran trader bets $438 million on pullback as BTC consolidates

Bitcoin failed to break above its recent high of $126,272 and is trading around $121,550. The market is showing consolidation, with traders split between taking profits and making new contributions. Importantly, derivatives data and spot flows reveal a divergence in investor sentiment as veteran traders place huge short bets against top cryptocurrencies.

Market consolidation after sharp rise

Bitcoin soared from $108,667 to $126,000 before encountering stiff resistance that caused a retracement. The 4-hour chart currently shows price stabilizing between $121,000 and $119,500, an area that coincides with key Fibonacci and EMA support. Buyers are defending the 0.618 Fibonacci zone at $119,547, preventing further declines.

However, the failure to sustain above $126,000 cuts short-term highs and indicates potential depletion. Immediate resistance lies near the 20-EMA at $122,031, followed by $122,774. If the price breaks decisively above $123,000, bullish momentum could be rekindled towards $126,272 and beyond. Conversely, a decline below $119,500 could extend the correction to $117,470 and even $115,392, where the 200-EMA provides dynamic support.

Related: XRP Price Prediction: Analysts Wary Whale Selling and Derivatives Flow Caps on Top Prices

Open Interest and Futures Data Signals Mixed Sentiment

Open interest in Bitcoin futures rose to $90.24 billion, the highest since the current bull cycle began. This surge indicates increased speculative activity and active participation. Both institutional investors and retail traders have increased their exposure, suggesting increased market confidence despite recent volatility.

Additionally, open interest has been rising along with price movements, reflecting traders’ willingness to place directional bets. Still, this buildup often occurs before volatility increases as positions are unwound. If Bitcoin struggles to break above $120,000, liquidations could increase price volatility, especially in a leveraged environment.

Spot flows reveal outflows and profit taking

Bitcoin spot net flows are not stable, with inflows and outflows alternating until 2025. On October 10, when the token traded at approximately $121,600, the exchange experienced net outflows of $119.71 million. Continued outflows since late September indicate investors are cashing in profits after the stock hit a record high.

Last month, capital inflows briefly exceeded $600 million as they recovered. However, the ongoing outflow pattern indicates that market momentum is cooling. Historically, such phases have been preceded by periods of consolidation before major trend reversals or continuations.

Huge short selling by veteran traders raises concerns

Adding to market tensions, early Bitcoin holders placed a $438 million leveraged short on decentralized exchange HyperLiquid. This trade includes 3,600 BTC and has a liquidation threshold of $139,900. This move reflects a calculated expectation of a short-term decline and is likely a hedge after previous spot sales.

According to Lookonchain data, the same entity sold 3,000 BTC this week and over 35,000 BTC last month, funneling some of the funds into Ethereum. While this type of action emphasizes strategic diversification, it is not pure bearishness and still serves to fuel trader caution.

Related: Ethereum price prediction: ETF flows mixed as BlackRock piles up

Technical outlook for Bitcoin price

The crisis level is also evident as Bitcoin remains at around $121,550 after being rejected at its previous high of around $126,272. The 4-hour chart shows that the return is close to the Fibonacci retracement level and the major moving averages.

• Top level: Immediate resistance levels include $122,774 (0.786 Fib) and $123,000, followed by a major hurdle at $126,272 (recent high). A break above this range could send Bitcoin towards $128,500 and $130,000.

• Lower price level: Immediate support is between $121,150 and $119,500 (0.618 Fib), followed by $117,470 (0.5 Fib) and $115,392 (0.382 Fib). The 200-EMA near $116,954 serves as a strong dynamic base for a broader uptrend.

• Upper limit of resistance: The $122,000-$123,000 zone remains a key area for a bullish impulse. If it continues to trade above this area, it could regain momentum and encourage further accumulation.

Technical settings show Bitcoin consolidating within a tightening range, suggesting volatility will be compressed before the next decisive move. The broader trend remains constructive as long as the price remains above $119,500.

Will Bitcoin continue to rise?

Bitcoin’s short-term trend will depend on whether the bulls can sustain the $119,500 support until they can retest the $123,000 support. A rise above this level would see the pace recover above $126,272 on the back of solid futures open interest and steady ETF inflows. On the other hand, if you cannot maintain above $119,000, a correction period up to $117,000 may begin.

Related: Dogecoin Price Prediction: Traders Eye $0.30 Target as DOGE Consolidates Again