The world’s largest cryptocurrency Bitcoin (BTC) continues to be under selling pressure while losing another support of $26,000 earlier this week. While some might think that this could be a good time to buy the dips, it seems Bitcoin isn’t out of the woods yet.
Popular crypto analyst Ali Martinez explains that historical data spanning the last decade reveals a pattern where Bitcoin ($BTC) triggers a bull run whenever its price surpasses the average cost basis of holders with a 6-month to 3-year track record.
Currently, this critical breakout level for BTC, based on this model, is identified at $33,755. This means that the BTC price should rally by over 30% from the current levels to confirm the bullish recovery. Otherwise, the gates for further BTC price correction are wide open.
Other market analysts have also shared similar opinions on the BTC price recovery. Bloomberg’s senior commodity strategist Mike McGlone compared Bitcoin’s price action to the Nikkei index. In his latest report, McGlone stated:
“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.”
Maintaining a position above approximately $31,000 would signal strength in Bitcoin’s recovery. However, there are valid reasons for the downward trend to persist – the Federal Reserve and most central banks are still implementing tightening measures, the strategist elaborated.
Bitcoin Chart Pattern Hints Major Correction
Bitcoin is forming a much similar chart pattern before the price crash after the 2021 bull run. As crypto analyst Rekt Capital explains:
In 2021, BTC formed two clear tops akin to a Double Top before forming the third top at a Lower High Right now, it looks like BTC 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 indicates a potential scenario where Bitcoin could establish its third peak at a lower high, leading to a rejection around the $26,000 support level. Following this, the fractal suggests Bitcoin might experience a rebound, but this could result in the $26,000 level turning into a new resistance before another downward rejection.
As reported earlier, September has historically been the month of major corrections for Bitcoin. The chart setup shows that this time could be no different.