The Current State of Bitcoin’s Price
Bitcoin has recently been on a downward trend, experiencing its third consecutive week of losses. The price has fallen approximately 11% below its all-time high of $124,500, which was reached on August 14. This decline has pushed the price below a critical level of $114,000, which had previously served as a strong support zone for the past six weeks.
The Importance of Reclaiming the $114,000 Level
For Bitcoin to confirm the strength of its bullish uptrend, it is essential that the price reclaims the $114,000 level and turns it back into a support zone. According to traders and analysts, a weekly close above this price point would be a significant indicator for a bullish continuation. A failure to do so could lead to a prolonged period of correction.
Bulls Defending a Key Support Level
Despite the recent downward movement, Bitcoin bulls have been actively defending the $109,000 support level. A long “wick” or tail on the chart, which appears below this price, signals solid buy pressure and shows that traders are actively trying to prevent the price from falling further. This shows that there is still a strong demand for Bitcoin at these lower price points.
Bearish Signals and the Threat of a Deeper Drop
While bulls are attempting to hold the line, the market has also shown some bearish indicators. Bitcoin’s price has dipped below the crucial $112,000 support, which has validated a “bear flag” pattern on the four-hour chart. A bear flag suggests that the bearish momentum will continue, with sellers gaining more control of the market.
The Bear Flag’s Measured Target
The bear flag pattern points to a potential decline toward a specific price point. The measured move target from this pattern suggests a drop to as low as $103,700. This represents a potential 6% decrease from the current price levels. This downside target is supported by liquidation data showing a large number of bid clusters, or buy orders, all the way down to $104,000. This indicates that the price is likely to sink deeper in order to “grab” the liquidity around that level.
Bearish Momentum Confirmed
The bearish sentiment is further confirmed by the relative strength index, which remains below the mid-line. The RSI is a momentum indicator that measures the speed and change of price movements. When it stays below the mid-line, it shows that the market’s momentum is currently on the side of the bears, reinforcing the idea that a deeper correction is possible if the key support levels are not held.
A Critical Week Ahead for Traders
The next few days are crucial for Bitcoin traders and investors. The market is at a crossroads, with strong resistance at the $114,000 level and important support at $109,000 and $112,000. A decisive weekly close above $114,000 would invalidate the bearish outlook and signal a return to bullish strength. However, if the price fails to regain this level and continues to fall, a more significant correction toward the $103,000 area may become a strong possibility.
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