In a turbulent week for the world’s largest cryptocurrency, Bitcoin (BTC), the digital asset faced mounting selling pressure as it tumbled below the crucial $26,000 support level. While some opportunistic investors might be eyeing the dips as a potential buying opportunity, experts warn that Bitcoin’s journey to recovery remains uncertain.
Delving deep into the crypto realm, the esteemed crypto analyst Ali Martinez exposes an intriguing historical pattern spanning the past decade. As per Martinez’s insights, Bitcoin typically kickstarts a bullish surge once its price exceeds the average acquisition cost of investors, with a track record spanning 6 months to 3 years in the crypto space.
The critical breakout level for BTC remains solid at $33,755 in the crypto world. This signifies that BTC’s price needs to surge by over 30% from its current point to confirm a bullish comeback. Falling short of this target could introduce additional price adjustments into the crypto landscape. Joining the chorus of analysts, Bloomberg’s senior commodity strategist, Mike McGlone, parallels Bitcoin’s price action and the Nikkei index.
“Bitcoin has had a close directional relationship with the Nikkei 225, and recent crypto weakness may portend contagion. That or the benchmark crypto might recover and follow the path of the Nikkei, which reached a 33-year high in June.”
Bitcoin’s $26,000 Support Zone Sparks Speculation
He emphasizes that Bitcoin’s resilience hinges on maintaining a position above approximately $31,000. However, underlying factors could stymie any upward momentum; central banks, including the Federal Reserve, continue to implement tightening measures, exerting downward pressure on BTC.
A daunting pattern reminiscent of the pre-crash setup following the 2021 bull run emerges in the crypto-sphere. Crypto analyst Rekt Capital paints a vivid picture, explaining that in 2021, BTC displayed two distinct tops akin to a Double Top pattern before reaching a third top at a Lower High. Presently, history seems poised to repeat itself, with BTC mirroring this pattern again, with the potential for a third top forming at a Lower High.
The 2021 fractal scenario raises the specter of Bitcoin establishing its third peak at a lower high, potentially leading to a rejection around the $26,000 support level.
Subsequently, the fractal scenario suggests that BTC could gradually rebound, only for the $26,000 level to morph into a formidable new resistance before encountering another downward rejection.
As the pages of the calendar flip, September emerges as a recurring harbinger of substantial Bitcoin corrections. The prevailing chart setup serves as an ominous reminder that this time may not be an exception to the rule.
The fate of Bitcoin hangs in the balance, and investors worldwide keenly watch to see if it will rise above the $33,755 threshold or succumb to the downward pressures reminiscent of its historical September struggles.
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