Bitcoin News: BTC Price Faces Volatility as Price Dips to $122K After Hitting $126K High

Key Takeaways:Bitcoin price drops 1.40% to below $120K after reaching record high of $126K yesterday12,000 BTC moved to exchanges, signaling increased whale selling pressureTechnical indicators show overbought conditions, raising risk of short-term correction Whales Move 12K BTC to Exchanges Amid Distribution SignalsOn-chain data from CryptoQuant reveals that whales have transferred 12,000 BTC to centralized exchanges over the past week. This mirrors behavior observed ahead of past corrections, notably in November 2024.A 12-year-old dormant wallet also moved 330 BTC (worth $39.1M) to new addresses, further stoking market concerns.The Exchange Whale Ratio stands at 0.50, a level historically associated with distribution risk.These moves suggest declining holder confidence near recent highs and an elevated risk of sell-offs. Technical Setup: Correction Risk Increases as RSI Stays OverboughtWhile Bitcoin maintains bullish momentum on higher timeframes, the short-term picture shows signs of technical fatigue:14-day RSI remains elevated at 64, suggesting overbought conditions.BTC failed to hold the 23.6% Fibonacci retracement level at $122,071.69.Source: TradingViewIt also trades below the pivot point of $124,715.55, a key short-term resistance.Price action below $120,000 could accelerate liquidation risk, especially with the next major support around the 50-day SMA at $114,127.Source: TradingViewMacro Backdrop: Dollar Weakness and Risk Appetite Still Favor BTCBTC’s recent rally was underpinned by macroeconomic shifts, including:A weakening U.S. dollar, on pace for its steepest annual decline since 1973.Rising inflation expectations and renewed rate cut prospects from the Federal Reserve. Outlook: BTC Faces Crucial Test at $120K SupportWhile the broader trend remains bullish, short-term risks are mounting. Analysts are closely watching the $120,000 support level. A decisive break below could open the door to deeper corrections toward $115,000.