Key points:
Bitcoin begins a retracement after hitting new all-time highs above $125,000.
Sunday trading produces BTC price volatility as traders eye potential bounce levels.
Institutions are on the radar as Bitcoin “debasement trade” talk heats up.
Bitcoin (BTC) experienced fresh volatility as it approached Sunday’s weekly close, following a BTC price correction from all-time highs.
Analysis: 4% BTC price drop possible
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dropping back below $123,000.
The pair hit new record highs above $125,000 earlier in the day, fueled by derivatives markets in unusual weekend trading.
Commenting on the latest price action, popular trader Skew warned that the entire move to the upside may be “bait” for longs.
“Passive shorts compounding here,” he observed in a post on X, referring to traders attempting to short price at the highs.
“Shorts opening here on the consensus that the weekend pump is bait.”
Data from CoinGlass showed liquidity on exchange order books being taken either side of price.
Crypto market participants tend to view weekend moves, both up and down, as unreliable indicators of where the price will ultimately head next, due to a lack of market liquidity.
Considering where the retracement may bottom, trader CrypNuevo eyed the 50-period exponential moving average (EMA) on four-hour timeframes, currently just above $118,000.
“For the week ahead, I think we could see a 4h50EMA retest – it’s overextended and you can see the retests in previous similar Price Action,” he wrote in an X thread.
“After that, we should see a new move up higher. Therefore, I’m still favoring longs over shorts from the 4h50EMA.”
Popular trader and analyst Rekt Capital also used historical comparisons to chart future BTC price performance. $124,000, he argued, may take time to break definitively.
“There’s should be no surprise that Bitcoin has rejected from ~$124k on the first time of asking in this uptrend. After all, the last time Bitcoin rejected from $124k, the rejection preceded a -13% pullback,” he reasoned.
“Bitcoin needs to prove this $124k resistance is a weakening point of rejection. And any shallower dip or pullback from here would do just that.”
Rekt Capital added that BTC/USD could drop as much as 4% and still preserve the weekly uptrend.
Bitcoin “debasement trade” gathers steam
Bullish takes, meanwhile, focused on the presence of institutional interest.
Related: JPMorgan, Citi see Bitcoin Q4 boom: Here are their price targets
Caleb Franzen, creator of financial research resource Cubic Analytics, said that the absence of BTC price pullbacks so far demonstrated sizable demand.
“When I see short-term price action like this, with minimal pullbacks and large spikes to the upside followed by sustained bids, I see institutions,” part of various X updates on the day read.
Mainstream finance commentators referenced Bitcoin’s position in the “debasement trade,” referring to investors’ desire to hedge against the declining value of fiat currencies.
Digital #Gold – aka #Bitcoin – is following its analogue counterpart, hitting a new record high >$125k – a milestone in the ongoing debasement trade, as investors seek protection from currency devaluation. pic.twitter.com/KHjeet5EW8
— Holger Zschaepitz (@Schuldensuehner) October 5, 2025
Cointelegraph reported on the trend, the name of which was coined by analysts at JPMorgan, at the start of the year.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
