Bitcoin‘s price rebounded by approximately 18.50% within a week after dropping to a six-month low of $49,755. However, due to a mix of technical and on-chain indicators, the cryptocurrency may face further corrections in the coming weeks. Bitcoin’s ongoing correction cycle coincided with a decline in the percentage of long-term holders’ profits, calculated based on the 30-day moving average.
What’s Happening on the Bitcoin Front?
As of August 16, about 83% of these Bitcoin holders were in a profitable position. In March, the percentage of long-term investors making a profit was around 96%. A high number of Bitcoins held in profit is usually seen as a sign of FOMO that precedes or coincides with price corrections. As a result of this on-chain signal, if LTHs decide to take profits, Bitcoin’s price may see pullbacks in the coming days.
Bitcoin’s ongoing consolidation movements highlight a rising triangle pattern. This setup technically forms after a strong downtrend, indicating a possible reversal or weakening of downward momentum. However, in some cases, a rising triangle can act as a continuation pattern in a downtrend. If the price fails to break above the resistance and instead breaks below the rising trendline, the downtrend may continue. This indicates that sellers have regained control.
Bitcoin faces downside risks if it remains below the immediate resistance level, aligned with the 50-4H exponential moving average (50-4H EMA; red wave) at around $59,280. A decisive break below the triangle’s lower trendline will likely trigger a selling process.
Details on the Subject
As mentioned, rising triangles are considered bullish reversal patterns in a downtrend. Therefore, a decisive close above Bitcoin’s 50-4H EMA increases the likelihood of rising towards the upper trendline of the triangle, aligned with the 200-4H EMA at around $59,240. Meanwhile, a successful close above the upper trendline will trigger the rising triangle breakout scenario with an upward target of approximately $70,000.
The bullish setup aligns with the outlook presented by Charles Edwards, founder of the crypto asset fund Capriole Investments. Edwards argues that Bitcoin’s price is trailing behind safe-haven rival gold. He overlaid Bitcoin’s chart on gold’s chart and acknowledged that the precious metal is three months ahead in its movement. Gold has already broken out upward from its previous consolidation trend, which could cause Bitcoin to do the same.
