Potential Two-Month Bear Phase for Bitcoin Price — An Analysis
Bitcoin may face an extended period of bearish pressure, lasting up to two months, before a possible breakout emerges from a bullish chart pattern.
Bitcoin’s Current Downtrend: Insights from Analysts
Popular analyst Rekt Capital suggests that Bitcoin’s price (BTC) is currently undergoing a downside deviation, which may persist for nearly two months. In a recent post, Rekt Capital remarked:
“Bitcoin has returned to the Range Low area, with scope still for additional downside deviation in the near future. And currently, at ~110 days after the Halving, Bitcoin is slowly getting closer to its historical breakout point of 150-160 days after the Halving.”
On August 5, Bitcoin’s price briefly fell below $50,000 following a decision by the Bank of Japan to raise interest rates from 0% to 0.25%. This move had ripple effects on the markets, including Bitcoin, as traders had been borrowing Japanese Yen at low rates to invest in U.S. assets.
The overall cryptocurrency market faced a significant downturn, leading to a loss of approximately $510 billion in market capitalization, marking the most substantial three-day sell-off in over a year.
Possible Bullish Outlook after the Current Downtrend
Despite these challenges, there is hope among crypto investors due to the formation of a bullish chart pattern known as a “bull flag.” This pattern is recognized for signaling potential rallies. Analyst Satoshi Flipper stated:
“The most epic bull flag in $BTC history has been forming for 7 months now; imagine being upset about this.”
Additionally, crypto analyst Elja indicated that a similar bullish flag is forming on the monthly chart, expressing optimism about an upcoming breakout:
“BTC giant bull flag. The Bitcoin breakout pump will be legendary.”
However, in the shorter term, Bitcoin’s downtrend may extend to around $42,000, as suggested by Alex Kuptsikevich, senior market analyst at FXPro. He cautioned that without strong buying support, Bitcoin could experience further decline:
“At its lowest point, Bitcoin dipped below its 50-week moving average. Without strong buyer support right now, it goes even lower, and it would trigger an even more active sell-off as it did in late 2021 and early 2022. If it doesn’t hold either, it’s worth preparing for a failure toward $42K.”
This analysis does not constitute financial advice. All investment and trading activities inherently involve risk, and readers are encouraged to conduct thorough research prior to making any financial decisions.