Bitcoin News Today: Bitcoin breaks rising wedge as bearish technical signals intensify correction risks

Bitcoin’s recent price action has triggered concerns among analysts as the cryptocurrency breaks below a rising wedge pattern, raising the possibility of a deeper correction. The breakdown, confirmed by technical analysts, indicates increased bearish pressure and a potential test of key support levels. Bitcoin has already corrected nearly 8% since hitting a record high of over $124,500 just four days ago [1].

A rising wedge is traditionally seen as a bearish reversal structure, particularly after a sustained uptrend. In Bitcoin’s case, the pattern has been forming since April, with higher highs and higher lows converging toward a tightening range [1]. The recent breakdown below the wedge’s support trendline signals weakening momentum and stronger selling pressure, according to analysts [1]. Immediate support is now seen at $110,000–$112,000, with further declines possible if this level fails [1]. A breakdown scenario could extend the decline to $105,000–$108,000 and eventually test the critical $98,000–$100,000 psychological zone by September [1].

Using the standard method for measuring a rising wedge breakdown—subtracting the pattern’s height from the breakdown point—the downside target for Bitcoin could fall as low as $88,000 [1]. However, this bearish scenario could be invalidated if Bitcoin manages to hold above its 50-day exponential moving average (EMA), which has historically acted as a strong support zone during its significant rally since April [1]. In that case, a rebound toward the wedge’s upper trendline near $125,000 by September remains a possibility.

In addition to the rising wedge breakdown, Bitcoin’s weekly chart has formed a potential double top pattern, similar to the one seen in 2021 [1]. This pattern, marked by two consecutive peaks at roughly the same level, has historically signaled a weakening of bullish momentum. In 2021, such a pattern preceded a 77% correction, with Bitcoin falling from around $69,000 to below $16,000 in the months that followed. If the current double top plays out in a similar manner, Bitcoin could drop toward its 50-day EMA, currently around $94,750 by September [1].

On-chain data further supports the possibility of a deeper correction. The number of mega whale addresses holding more than 10,000 BTC has dropped to its lowest level this year, with a sustained negative trend since mid-July, according to onchain analytics platform Glassnode [1]. Additionally, the count of wallets holding between 1,000 and 10,000 BTC has also declined, indicating profit-taking near recent price highs. Combined with deteriorating technical indicators, these trends suggest increased selling pressure and the likelihood of a broader pullback unless strong buying demand reemerges [1].

Despite these bearish signals, there is one key difference between the 2021 and current price cycles. In 2021, Bitcoin reached its peak as the Federal Reserve began tapering and shifting toward quantitative tightening. This time, however, market odds favor a 25-basis-point (bps) rate cut by the Federal Reserve in September, according to CME data [1]. Some analysts suggest that a Fed rate cut, combined with a growing global money supply (M2), could create a more favorable environment for Bitcoin, potentially pushing the price toward $132,000 or even as high as $170,000 in the coming months [1].

Source:

[1] Bitcoin price rising wedge breakdown: How low can BTC go? (https://cointelegraph.com/news/btc-price-rising-wedge-breakdown-how-low-can-bitcoin-go?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound)