Will Bitcoin Price Experience Another Crash?

Bitcoin’s price has rebounded 18.50% after hitting a low of around $49,755. Despite this recovery, technical indicators suggest possible further corrections due to a declining percentage of long-term holders in profit. The ongoing formation of an ascending triangle pattern could signal bullish or bearish outcomes. The impact of external economic factors, such as interest rate adjustments, may also influence Bitcoin’s future price performance.

Bitcoin (BTC) has experienced an 18.50% rebound over the past week, recovering from a six-month low of approximately $49,755. Nevertheless, a combination of technical and on-chain indicators suggests that further price corrections may occur in the near future. Investors are urged to consider these signals as they assess market conditions.

Currently, over 80% of Bitcoin’s long-term traders remain profitable, indicated by analyses on a 30-day moving average. As of mid-August, around 83% of long-term holders, defined as those who have possessed Bitcoin for over 155 days, were in profit. This figure has declined from nearly 96% in March, hinting at a possible profit-taking scenario which could influence Bitcoin’s price negatively.

The current price movements imply a consolidation pattern resembling an ascending triangle, typically indicating potential reversals in downtrends. However, should Bitcoin fail to break out of the current resistance and instead breach the rising trendline, it may see a resumption of the downward price trend. Staying beneath the immediate resistance level near $59,280 could usher in further downside risks.

Conversely, if Bitcoin breaks decisively above its 50-4H exponential moving average (EMA), the situation may shift towards bullish. Closing above this resistance could lead to a rally towards the upper trendline target of approximately $59,240, indicating renewed market confidence.

A successful breakout above the upper trendline may set a target of around $70,000 for Bitcoin, as suggested by market analysts including Charles Edwards of Capriole Investments. Edwards has noted that Bitcoin often lags behind gold in market movements, suggesting a similar surge could soon occur.

Macro economic factors such as anticipated rate cuts from the Federal Reserve could further enhance Bitcoin’s upside potential, as lower rates may lead to increased demand for riskier assets. It is essential for investors to approach these market dynamics with caution, conducting their own thorough research prior to making investment decisions.