Bitcoin faces potential retracement after reaching new all-time high

Bitcoin recently reached a new all-time high, surpassing $108,000. This surge drew attention from both retail and institutional investors. However, a recent Federal Reserve rate cut led to a market shakeout and a pullback from the peak price.

Bitcoin's Current Market Dynamics

Bitcoin is now exhibiting sideways movement, raising concerns about a potential extended retracement. The current market dynamics suggest that the bullish momentum has waned, with Bitcoin entering a phase of consolidation. Traders are taking profits and distributing their holdings, and there is a possibility of a corrective retracement phase.

Analysts are closely monitoring the $100,000 mark as a critical support zone. On the 4-hour chart, Bitcoin's price has shown signs of weakening bullish momentum and increased volatility. It is currently trading within an ascending wedge pattern, suggesting a brief correction or distribution phase. If a deeper correction occurs, Bitcoin could find support within the 0.5 to 0.618 Fibonacci retracement levels.

Market Sentiment and On-Chain Analysis

The market sentiment remains mixed, with some investors optimistic about a recovery while others are wary of further declines. On-chain analysis shows that long-term holders may be selling their assets at the recent all-time high, potentially leading to increased volatility and a price correction. The interplay between technical analysis and on-chain metrics will be crucial for understanding future price movements.

Market participants are advised to stay informed and adapt their strategies accordingly.

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