Bitcoin just flash-dipped below $117,000 as more than $800M in leveraged longs were wiped out, igniting a fierce debate: is this a healthy reset before the next leg up, or the start of a deeper retrace? While smaller traders flinched, large holders quietly accumulated into weakness. With inflation data surprising to the upside and the Treasury signaling it won’t directly buy BTC for reserves, the next move may hinge on whether bulls can defend the $116,000–$117,000 shelf—and how quickly price can reclaim $120,000.

What’s Happening

BTC rebounded to trade near $118,000 after a weekend flush that triggered broad liquidations. Technicians flag $120,000 as the first major resistance (reinforced by VWAP and volume profiles), with immediate demand near $118,200 and stronger support clustered around $116,300, aligning with the 200-day EMA and key Fibonacci levels. Four-hour RSI hidden bullish divergence hints at rebound potential, but daily bearish divergence warns of lingering downside risk.

Why It Matters to Traders

Washington’s stance matters: Treasury Secretary Scott Bessent clarified no direct BTC purchases for reserves, favoring reliance on confiscated assets. That removes an incremental bid and makes BTC more sensitive to macro shocks. A hotter-than-expected PPI print revived inflation concerns, pressuring risk assets and nudging rate expectations higher. In this regime, liquidity and positioning—not just crypto-native factors—drive intraday direction.

Key Levels to Watch

• Support: $118,200 (near-term), $116,300 (confluence with 200-day EMA). Breaks expose $113,000 then $110,000.
• Resistance: $120,000 initial; sustained reclaim opens $126,000 then $130,000.
• Momentum: 4H hidden bullish divergence vs. daily bearish divergence = mixed signals; confirm with volume and closes.

Flow and Positioning

On-chain trackers show whale accumulation into the dip—often a sign of medium-term confidence ahead of the 2025 halving, which historically tightens supply growth. Institutional interest and scaling work (e.g., Lightning) could amplify macro cycles, but in the short term, funding, open interest, and liquidation pockets will continue to dictate volatility.

Actionable Playbook (Not Financial Advice)

• Scenario A: Reclaim and hold $120K on strong volume and a 4H close above VWAP → consider momentum setups targeting $126K–$130K. Invalidate on loss of $118.5K.
• Scenario B: Clean break below $116K with weak bounce → expect sweeps toward $113K and possibly $110K. Consider hedges or staged bids only at predefined levels; avoid catching knives without confirmations.
• Risk: Keep position sizes small into macro prints. Use hard stops; don’t widen them after entry.
• Confirmations: Track 4H/1D RSI structure, 200-day EMA reactions, and spot-led bounces vs. perp-led squeezes.
• Macro dashboard: Watch U.S. yields, DXY, and rate expectations; rising real yields tend to cap BTC rallies.
• Derivatives: Monitor funding/OI resets after the liquidation—fresh leverage direction often sets the next swing.

Bottom Line

This looks like a classic post-liquidation crossroads: hold $116K–$117K and a push through $120K can re-ignite upside, but failure invites a deeper check of $113K–$110K. Trade the levels, respect the macro, and let confirmations—not narratives—dictate risk.

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