- Bitcoin (BTC), the world’s largest cryptocurrency, continued to face selling pressure as it lost another support level of $26,000 earlier this week.
- A strategist noted that there are valid reasons for the downward trend to continue, citing the Federal Reserve’s and most central banks’ ongoing tightening measures.
- BTC’s 2021 fractal suggests a potential scenario where Bitcoin could form its third peak at a lower level and reject the $26,000 support level.
What price level does Bitcoin need to hold onto to confirm a bull run? Correction still possible!
Which Price Level is Critical for Bitcoin?
Bitcoin, the world’s largest cryptocurrency, continued to face selling pressure as it lost another support level of $26,000 earlier this week. While some may consider this a good time to buy the dips, it appears that Bitcoin has not yet escaped danger.
Popular crypto analyst Ali Martinez explains that historical data spanning the last ten years suggests a model where Bitcoin triggers a bull run when owners with a 6-month to 3-year history surpass their average cost base.
Currently, according to this model, the critical breakout level for BTC is defined as $33,755. This means that BTC’s price needs to rise by over 30% from current levels to confirm an upward recovery. Otherwise, the doors are wide open for further BTC price corrections.
Other market analysts have shared similar views regarding a BTC price recovery. Bloomberg’s Senior Commodity Strategist Mike McGlone likens Bitcoin’s price movement to the Nikkei index. In his recent report, McGlone stated:
“Bitcoin had a similar directional relationship with the Nikkei 225, and the recent crypto weakness may be contagious. Or, the measured cryptocurrency can recover and follow the path of the Nikkei, which reached a 33-year high in June.”
To demonstrate the strength of a Bitcoin recovery, a position above approximately $31,000 needs to be maintained. However, the strategist noted that there are valid reasons for the downward trend to continue, citing the Federal Reserve’s and most central banks’ ongoing tightening measures.
Formation in Bitcoin Suggests a Significant Correction
Bitcoin is currently forming a chart pattern that closely resembles one created before the price decline following the 2021 bull run. As explained by crypto analyst Rekt Capital:
“In 2021, BTC formed two open peaks resembling a Double Top and then formed a third peak with a Lower High. Currently, BTC is once again forming two open peaks resembling a Double Top and appears to have the potential to form a third peak with a Lower High.”
BTC’s 2021 fractal suggests a potential scenario where Bitcoin could form its third peak at a lower level and reject the $26,000 support level. Following this, the fractal suggests that Bitcoin could experience a recovery, but it might turn the $26,000 level into a new resistance before another downward rejection occurs.
As previously reported, September has historically been a month of significant corrections for Bitcoin. The chart setup indicates that this time may not be any different.
