Bitcoin News Today: Bitcoin’s technical breakdown raises 20% correction fears

Bitcoin has fallen below the 50-day Exponential Moving Average (EMA), a key technical support level, as it trades around $113,340. This breakdown has triggered concerns about deeper price corrections. The EMA50 breakdown is a significant technical event, typically signaling a potential bearish shift in the market dynamics. Analysts have highlighted that Bitcoin has turned an eight-year resistance line into support, suggesting a possible bullish trend despite recent price declines. However, the current breakdown indicates weakening momentum and rising seller pressure [1].

Technical indicators further support the bearish scenario. Bitcoin has confirmed a breakdown from its rising wedge pattern on the daily chart, a bearish reversal structure that typically precedes sharp declines, especially after a sustained uptrend. The breakdown below the wedge’s support trendline points to a test of Bitcoin’s recent resistance-turned-support targets. Immediate support is identified at $110,000–$112,000. If this level is breached, the price could drop to $105,000–$108,000. Further declines could see Bitcoin test the key $98,000–$100,000 psychological zone by September, representing a 20% correction from its recent peak [2].

The breakdown below the wedge’s support trendline is particularly concerning as it aligns with weakening technicals and rising whale-driven selling pressure. On-chain metrics indicate that the number of mega whale addresses holding over 10,000 BTC has dropped to its lowest level this year. Whale wallets holding between 1,000 and 10,000 BTC have also declined, reflecting profit-taking near Bitcoin’s recent highs. Combined with the rising wedge breakdown, this whale-driven selling pressure increases the risk of a broader pullback unless strong spot demand returns [2].

Bitcoin’s double-top scenario, similar to the 2021 pattern, hints at potential downside risks. A double top is a bearish reversal pattern marked by two consecutive peaks around the same level, signaling weakening momentum. In 2021, this pattern preceded a 77% correction, with BTC dropping from around $69,000 to below $16,000 in the following months. The current setup suggests a similar scenario could unfold, with Bitcoin potentially falling toward its 50-day EMA (the red wave) at around $94,750 by September [2].

Institutional demand, however, remains a counterbalance to the bearish technical indicators. Japanese investment firm Metaplanet recently disclosed the purchase of an additional 775 BTC, raising its total holdings to 18,888 BTC. This acquisition underscores growing institutional adoption, even amid short-term price weakness. Data from SoSoValue shows that institutional net inflows reached $547.82 million last week, up from $246.75 million the previous week, albeit below mid-July levels. Analysts suggest that sustained inflows will be necessary for Bitcoin to regain upward momentum [6].

Despite the recent pullback, some analysts remain cautiously optimistic. The 50-day EMA has historically acted as a strong support zone during Bitcoin’s 50%-plus rise since April. If Bitcoin holds above this level, it could rebound toward the wedge’s upper trendline at around $125,000 by September. The 50-week EMA has also acted as a strong accumulation zone since June 2023, providing another potential support level for the price [2].

The market is also closely watching geopolitical developments, including potential U.S. security guarantees for Ukraine. While these developments could influence investor sentiment and impact risk assets, the immediate focus remains on Bitcoin’s technical indicators. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) both indicate bearish momentum, with the RSI reading 44 on the daily chart and the MACD showing a bearish crossover on Sunday [6].

In summary, Bitcoin’s breakdown below the 50-day EMA and the rising wedge pattern suggest a bearish shift in the market. However, institutional demand and potential geopolitical developments could provide support and influence the price trajectory. Investors and analysts will closely monitor Bitcoin’s ability to hold above key support levels and the impact of broader market dynamics on its price action.

Source:

[1] Bitcoin Dips Below EMA50 as Franklin CEO Highlights (https://intellectia.ai/news/crypto/bitcoin-slips-under-ema50-franklin-ceo-stresses-blockchain-disruption)

[2] Bitcoin Price Rising Wedge Breakdown: How Low Can ... (https://cointelegraph.com/news/btc-price-rising-wedge-breakdown-how-low-can-bitcoin-go)

[3] Bitcoin tests key 50-day EMA support as Ethereum, XRP ... (https://www.fxstreet.com/cryptocurrencies/news/crypto-today-bitcoin-ethereum-xrp-risk-further-losses-as-liquidations-cross-500-million-202508181127)

[4] Bitcoin Price Is Going Down as Market Stress Tests Bulls ... (https://www.financemagnates.com/trending/bitcoin-price-is-going-down-as-market-stress-tests-bulls-before-jackson-hole/)

[5] Bitcoin Price Forecast: How low can BTC go? (https://www.fxstreet.com/cryptocurrencies/news/bitcoin-price-forecast-btc-momentum-fades-edging-below-115-000-despite-putin-zelenskyy-meeting-on-the-cards-202508191016)

[6] Bitcoin Drops Below $116000 as Market Awaits Fed and ... (https://margex.com/en/blog/bitcoin-drops-below-116000-as-market-awaits-fed-and-geopolitical-signals/)