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ToggleBitcoin may be preparing for a short-term correction, as three key technical factors, including price divergence, CME gap, and high IBCI index, are signaling the risk of dropping below the $115,000 mark.
Currently, Bitcoin is beginning to show potential weakening signals, with three important charts indicating the possibility of forming a new Dip in July. Although the long-term trend remains positive, traders should be cautious about the approaching short-term volatility.
One notable sign is the hidden price divergence between price and Relative Strength Index (RSI) – an indicator measuring market momentum. Hidden price divergence occurs when the price sets a new high, but RSI remains flat or creates a lower peak. This suggests the upward momentum is weakening, potentially risking a correction.
A similar pattern occurred in March 2024, leading to a nearly 20% drop in just a few days. Currently, a similar divergence pattern is recurring, indicating the potential for a deeper correction in the short term, with a potential support level below $115,000.
CME Gap Becomes a "Magnet" Pulling Bitcoin Price Adjustment
There is currently a CME gap on Bitcoin's daily chart, located in the price range of $114,380 - $115,635. This gap formed when BTC price fluctuated outside the Chicago Mercantile Exchange (CME) trading hours, creating a price area that has not been filled – a phenomenon that typically attracts price to "close the gap" in subsequent trading sessions.
History has proven the importance of CME gaps, with Bitcoin tending to fill these price areas in the next cycle. In 2025 alone, 7 out of 9 CME gaps have been filled, leaving only the mentioned price range and a smaller gap between $91,970 - $92,450 still open.
Such a high fill rate further reinforces the likelihood of Bitcoin returning to the $115,000 area in the short term, as part of a technical correction – especially in the context of weakening signals and increasingly apparent price divergence.
Bitcoin Moving into Distribution Zone, Short-Term Correction Warning Signal
Anonymous Crypto analyst Gaah noted that the Bitcoin Cycle Index (IBCI) has officially entered the distribution zone, a historical area typically associated with excessive excitement and temporary market peaks. This is the third time this index has touched the warning zone in the current price cycle.
Although the IBCI has only reached 80%, the lower threshold of the distribution zone, and has not yet touched the absolute 100% peak as in previous cycles, Gaah still considers this a notable warning signal.
Other important on-chain indicators like Puell Multiple and STH-SOPR (Short-Term Holder Spend Ratio) are currently below the Medium level, indicating that speculative sentiment of small investors and selling pressure from Miners have not yet reached their peak.
Gaah emphasized: "The current IBCI behavior is a reliable warning signal – showing that the market is in a high short-term correction risk zone, but not necessarily at the peak of the long-term growth cycle."
This article does not contain investment advice or recommendations. All investment and trading decisions carry risks, and readers should conduct their own research before making decisions.
