Bitcoin (BTC) is making headlines again as its price experiences significant volatility after reaching record highs. Recent technical analysis and market trends indicate that further corrections could be on the way. Here’s a detailed breakdown of what to expect in the coming weeks.
Bitcoin’s Rising Wedge Breakdown
Bitcoin recently confirmed a breakdown from a rising wedge pattern on its daily chart. This classic bearish reversal pattern appears when higher highs and higher lows compress toward an apex, only to break downward. Analysts, including Captain Faibik, have highlighted that this formation began in April and is signaling significant downside risks for the cryptocurrency.
Key support levels to watch are in the $110,000–$112,000 range. A failure to maintain these levels could lead the price to test the $105,000–$108,000 zone. Critics predict a potential decline toward the psychological level of $98,000–$100,000 if selling pressure intensifies, amounting to a 20% correction from BTC’s recent peak of $124,500.
The Double-Top Bearish Pattern
Adding to Bitcoin’s challenges is the potential emergence of a double-top pattern, a bearish indicator that often precedes steep declines. This pattern was last seen in 2021 when BTC dropped dramatically from $69,000 to below $16,000.
This time, analysts, including Swissblock, suggest that Bitcoin risks falling toward its 50-day exponential moving average (EMA) at approximately $94,750. However, if BTC can hold above this level, there is potential for a rebound to the upper wedge trendline near $125,000 by September.
On-Chain Metrics Reveal Whale Activity
The bearish signals don’t stop at technical patterns. On-chain data reveals that the number of whale addresses (holding over 10,000 BTC) has dropped to its lowest level this year. Medium-sized whale wallets (holding 1,000–10,000 BTC) are also declining, suggesting profit-taking by large investors near Bitcoin’s recent highs.
This reduction in whale activity could amplify selling pressures, raising the possibility of a prolonged pullback unless strong demand returns to the market.
Macroeconomic Factors Could Shift Trajectory
There is one key variable differentiating this market cycle from 2021. While Bitcoin’s price peaked last time amid tightening Federal Reserve monetary policies, this year’s cycle aligns with expectations of a 25-basis-point (bps) rate cut by the Fed in September.
Additionally, the growing global money supply (M2) has led some analysts to propose a bullish price target of $132,000 or even $170,000 for Bitcoin in the coming months. These liquidity trends could provide crucial support against short-term technical weaknesses.
Protect Your Investments
Bitcoin’s current volatility highlights the importance of managing risk in cryptocurrency trading. Investors are encouraged to keep an eye on key support levels and macroeconomic developments. For those looking to trade or invest securely, using a reputable crypto wallet like the Ledger Nano X is an excellent way to protect your digital assets.
Note: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies are highly volatile, and all trading decisions should be based on thorough research.
