Bitcoin struggles amid selling pressure, analysts see potential for further correction

Bitcoin struggles amid selling pressure, analysts see potential for further correction

Bitcoin (BTC), the world's largest cryptocurrency, has been facing significant selling pressure, losing its $26,000 support level earlier this week. Analysts are suggesting that the downward trend may persist due to various factors, including macroeconomic conditions and historical data patterns.

Crypto analyst Ali Martinez has indicated that Bitcoin typically triggers a bull run whenever its price surpasses the average cost basis of holders with a 6-month to 3-year track record. However, based on this model, Bitcoin's critical breakout level is currently pegged at $33,755. This means that Bitcoin's price would need to rally by over 30% from current levels to confirm a bullish recovery. If not, the cryptocurrency could be in for further price correction.

Other market analysts have echoed similar sentiments. Bloomberg's senior commodity strategist Mike McGlone compared Bitcoin's price action to the Nikkei index, stating that maintaining a position above approximately $31,000 would signal strength in Bitcoin's recovery. However, he also pointed out valid reasons for the downward trend to continue. The Federal Reserve and most central banks are still implementing tightening measures, which could impact Bitcoin's price.

In addition to these observations, Bitcoin appears to be forming a chart pattern similar to the one before the price crash following the 2021 bull run. According to crypto analyst Rekt Capital, Bitcoin has once again formed two clear tops akin to a Double Top with a potential third top forming at a Lower High.

The BTC 2021 fractal suggests a potential scenario where Bitcoin could establish its third peak at a lower high, leading to a rejection around the $26,000 support level. This could result in the $26,000 level turning into new resistance before another downward rejection.

Historically, September has been a month of major corrections for Bitcoin and current chart setup indicates that this time might not be different. As such, market participants are advised to monitor these developments closely as they navigate the volatile cryptocurrency landscape.

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