Even as Bitcoin (CRYPTO: BTC) slipped below $115,000 on Monday morning after rejecting resistance at $122,000 over the weekend, analysts are pointing to a decisive test at $112,000 that could determine whether the market stabilizes or accelerates lower.
What Happened: Pseudonymous crypto trader Ali noted on Monday that the rejection formed a deviation pattern, often a signal of weakness that can open the door to deeper pullbacks.
He said Bitcoin is currently trading within a range between $122,000 and $112,000, but a failure to hold the lower band could expose a liquidity gap down to $108,000.
"$112,000 must hold because on-chain data shows a liquidity gap between $112,000 and $108,000. Losing that support could quickly trigger a sharp $4,000 drop," Ali explained.
He added that the Accumulation Trend Score has dropped to 0.20, reflecting redistribution by holders rather than fresh accumulation at current levels.
Meanwhile, another widely followed trader is warning that Bitcoin's price action may be echoing the final stages of the 2021 bull market.
In a YouTube video, Cheds described Bitcoin's latest reversal as an "upthrust," a failed breakout widely seen as a bull trap.
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"It's when you break a resistance level and you come back [down] and fail to hold. That's the upthrust," Cheds said, highlighting the large red candle on August 14 as a warning signal.
He compared the pattern to Bitcoin's failed attempt to hold above $69,000 in 2021, which marked the beginning of a prolonged bear cycle.
Why It Matters: Not all observers see the correction as a bearish omen.
Jan Happel and Yann Alleman, co-founders of Glassnode, argue the move is more likely a shakeout before the next upward leg.
"Market makers are moving large amounts of ETH and BTC onto exchanges, likely using this short-term market weakness to walk prices down," they wrote on X under the handle Negentropic.
"This is often a shakeout before the next leg higher. Use the pullback to build positions and catch entries you missed."
As of publication, Bitcoin is trading at $116,040, down nearly 1.7% on the day.
Traders now view the $112,000 level as the critical line separating a contained correction from a broader reversal.
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