Bitcoin’s recent price action has sparked renewed concerns among traders and analysts, with technical indicators pointing to a possible correction. A combination of bearish chart patterns and large whale short positions has raised the question: is the current bull run nearing exhaustion?

Rising Wedge Signals Bearish Reversal Risk

Bitcoin is currently trading within a rising wedge on the weekly chart, a formation often linked to bearish reversals. The price is testing critical support near $110,000. A weekly close below this level may trigger a move towards the wedge’s projected downside target of around $74,000.
This potential decline would represent a 34% drop from current levels and coincide with the price peak seen in March 2024.

Analysts have highlighted a growing divergence between Bitcoin’s price and the relative strength index (RSI), indicating weakening momentum. Captain Faibik, a prominent market observer, remarked that while bulls remain in control for now, momentum is fading, warning of a sharp correction once the wedge structure breaks.

Analysts Warn of “Major Shakeout”

Veteran trader Peter Brandt believes a significant shakeout could unfold before Bitcoin revisits its all-time highs above $126,000. He suggested that although extreme declines of 80% may be a thing of the past, a retreat to the $50,000–$60,000 range cannot be ruled out.

BTC/USD daily price chart.

Such a correction would test investor conviction and flush out overly leveraged positions.

Whale Activity Adds to Downside Pressure

Onchain data has revealed aggressive positioning by large holders. A whale on the Hyperliquid exchange has reportedly opened a Bitcoin short worth $140 million using 5x leverage, with a liquidation level set at $137,700.
This move follows another major trader who extended an existing $500 million short position earlier in the week at 10x leverage.

These substantial bets against Bitcoin underscore growing expectations of a price pullback, especially as the market enters a period of elevated uncertainty.

Market Sentiment Reaches “Euphoria” Phase

The Net Unrealized Profit and Loss (NUPL) metric, which gauges market sentiment, has shifted from “optimism” to “euphoria.” Historically, this transition has preceded major market tops and subsequent corrections.
Periods of euphoria indicate that many investors are sitting on profits, increasing the risk of mass profit-taking during any price weakness.

If Bitcoin fails to maintain support above $110,000, the combination of overextended sentiment and large short positions could accelerate downward momentum.

Key Support Levels to Watch

For traders, the $110,000 zone remains the key battleground. A breakdown below this level could validate the bearish wedge projection and open the path to $74,000. Conversely, a strong defence of support might delay any correction and maintain the broader bullish structure.

As attention turns to forthcoming weekly closes and whale positioning, Bitcoin’s next major move may set the tone for the remainder of the market cycle.