Bitcoin Rejection at $120K Sparks Altcoin Downtrend Fears

Bitcoin’s historic rally lost momentum after it failed to hold above the psychological $120,000 level, sparking concern across the cryptocurrency market. The digital asset hit an all-time high of $122,838 on July 14 following an intense rally but quickly corrected to $116,000. Since then, its price has hovered between $117,000 and $118,500, showing signs of a slowdown.

Chart Analysis Raises Bearish Flags

Technical analyst Melikatrader94 posted a detailed view of Bitcoin’s structure, identifying the presence of a Quasimodo Level (QML) pattern in the $119,000 to $121,000 range.

A QML pattern is typically considered a reversal signal, where three noticeable peaks or troughs form with the middle point acting as a price pivot. The analyst noted that this structure, along with the recent rejection at the key zone, signals a bearish trend.

According to the analysis, Bitcoin’s failure to climb back above the QML resistance band suggests sellers are now in control. Momentum has shifted to the downside, and as long as BTC remains under this zone, the next area of support lies near $113,600. An initial pullback around $116,000 is still possible, but should that level break, further price decline is expected.

Did you know?
The QML (Quasimodo Level) pattern used to forecast Bitcoin’s recent move is popular among advanced forex traders, but its use in crypto technical analysis has risen sharply in the past two years.

Altcoins Struggle as Bitcoin Weakens

Altcoins began showing caution as Bitcoin corrected downward. XRP, which recently achieved a record-breaking high of $3.65, has since dipped toward $3.45. Traders are beginning to take profits, anticipating increased volatility.

Ethereum followed a similar path. It pushed above $3,600 for the first time in months but failed to sustain that strength and now fluctuates just below $3,500 in a period of consolidation.

Historically, altcoins tend to follow Bitcoin’s lead. When BTC moves sharply, it often causes reactive price shifts across the broader market, particularly in projects with strong short-term momentum.

A break below $116,000 could cause a domino effect, pulling more capital out of altcoins and exaggerating market corrections. While analysts note the long-term case for altcoins remains intact, short-term sentiment hinges on Bitcoin’s ability to stabilize or recover quickly.

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What Comes Next for Crypto Traders?

With direction now unclear, traders are adopting varied strategies. Some are fully exiting their positions in both BTC and altcoins; others are rotating into stablecoins to wait for clearer signals.

A more bullish camp is looking to accumulate at current levels, betting that support near $113,000 could provide a floor and another leg upward.

If Bitcoin breaks down from the current range and tests support at $113,600, investors should watch the responses closely. A strong rebound could reignite optimism, but a weak bounce or further slide may renew panic selling.

For Ethereum and XRP traders, protecting support levels around $3,400 and $3.40, respectively, will be pivotal. Failure to do so could put more downside pressure on the market going into the final weeks of July.

The next few sessions may shape the broader narrative heading into August. Bitcoin’s QML rejection has clearly introduced tension into the rally story, and the outcome at key support zones will likely determine whether this pullback is a temporary pause or the start of a deeper correction.