Bitcoin price analysis: Is the current correction a sign of a fall or an opportunity to rise?

Bitcoin (BTC) price is nearing its key support level after falling below $4,000. Closing the price below this level can be a sign of the continuation of the downward trend for this digital currency. Bitcoin price failed to break the daily resistance of $65,379 on Sunday and fell 7.5% over the next two days. Last night, it fell by 7% to close to $58,000 and is currently trading at $59,283.

If Bitcoin continues its downtrend and closes below the $58,783 level, it may fall another 4.5% to reach its daily support at $56,002.

Bitcoin price analysis

The relative strength index (RSI) on the daily chart of Bitcoin has fallen below the neutral level of 50, and the AO index is also moving below the neutral level of zero. The Awesome Oscillator (AO) is a popular technical indicator used by traders in various financial markets. If both indicators reach below their neutral level, this indicates weakness in momentum and a warning for the beginning of a downtrend.

However, if Bitcoin price holds the $58,783 support and closes above it, the bearish strategy will be invalidated and Bitcoin could rise 11% to retest the daily resistance at $65,379.

The downward scenario of the price of Bitcoin

To take a closer look at the Bitcoin price forecast, we should note that many traders have been very optimistic about the rise of Bitcoin over the past few days; A topic that is not very pleasant for the digital currency market. According to historical data, September has usually been the time when the price of Bitcoin has fallen, and because of this, caution in trading is very necessary. If we want to make a decision based on the performance of Bitcoin in September, we can say that selling Bitcoin in the price range above $60,000 is the best time to exit the market.

But why is Bitcoin and the entire crypto market in a downtrend? On the chart, you can see that the price is making lower floors and ceilings, which by definition means a downtrend. This process started in March 2024 and has not changed so far. Bitcoin price is inside a bearish channel on the daily chart and there are no signs of strength on higher timeframes! The bulls haven't been able to prove their strength yet, so it looks like this is a bullish trap and we're likely to see a 30% drop in the price of Bitcoin.

From an Elliott wave perspective, we have seen an ABC correction so far and it is too early to tell if this will turn into an impulse wave, but for now, this is a corrective structure. The problem is that everyone is bullish on the market again; Everyone sees a big bull market, but usually the market goes against these expectations.

Bitcoin price bullish scenario in the medium term

This analysis refers to a set of technical patterns that all lead to a common goal for the price of Bitcoin. In the chart below, there is an opening bearish corner, a bullish cup and handle pattern, and another opening bearish pattern. The congruence of these patterns confirms the bullish view of Bitcoin and indicates that a major upside move is in store for Bitcoin.

Although the price may fall in the short term, providing a good opportunity to buy for those who have not yet entered the market, the medium-term trend still looks bullish. This analysis predicts that the current fall of Bitcoin to the level of $58,000 is only a price pullback and Bitcoin is expected to climb to the range of $68,000 to $70,000 before the next correction begins.

Based on the chart above, the price range of $54,804 to $48,847 is an important support for Bitcoin, which many investors see as a golden buying opportunity. This analysis predicts that in the first step, the price of Bitcoin can reach the target of $73,701 in the coming weeks, and in the long term, the price area of ​​$95,408 to $114,500 can be considered as an important area to start heavy selling in the market. , which may lead to a sharp correction in the digital currency market.

summary

The price of Bitcoin (BTC) is approaching its key support level after a decline of $4,000, and the continuation or failure of this level will determine the future direction of the market. Technical indicators, including Relative Strength Index (RSI) and Awesome Oscillator (AO), indicate weakness in momentum and the possibility of a downtrend. If the price of Bitcoin closes below the level of $58,783, there is a possibility of a further decline to the level of $56,002.

At the same time, some analyzes point to a bullish scenario for the price of Bitcoin in the medium term. According to various technical patterns, these analyzes predict a big upward movement that can bring the price of Bitcoin to the range of 68-70 thousand dollars. Key support in the range of $54,804 to $48,847 could create a good buying opportunity. The final bullish target is also predicted in the range of $95,408 to $114,500, which may be followed by a sharp correction in the market.

Finally, both scenarios show that the Bitcoin market is in a delicate situation and traders should act carefully and pay attention to technical analysis.