Key takeaways:
Bitcoin risks a deeper correction toward $88K–$94K after breaking below a rising wedge.
A 2021-like double top pattern is increasing BTC’s odds of declining below $100,000.
Bitcoin (BTC) has corrected by nearly 8% since establishing its record high of over $124,500 four days ago. It now risks further declines due to a classic bearish reversal pattern.
A BTC price drop below $100,000 is still possible
Bitcoin has confirmed a breakdown from its rising wedge pattern on the daily chart, as highlighted by analyst Captain Faibik.
Traditional analysts see rising wedges as bearish reversal structures that typically precede sharp declines, especially after a sustained uptrend. In Bitcoin’s case, the wedge has been forming since April, with higher highs and higher lows compressing toward the apex.
The breakdown below the wedge’s support trendline points to a test of Bitcoin’s recent resistance-turned-support targets, signaling weakening momentum and rising seller pressure, the analyst said.
They highlighted immediate support at $110,000–$112,000. Losing this range could open the path toward $105,000–$108,000.
BTC may extend the decline to the key $98,000–$100,000 psychological zone by September, a 20% correction from its recent peak, if selling intensifies.
BTC price could drop to as low as $88,000
A rising wedge’s breakdown target is typically measured after subtracting the structure’s maximum height from the breakdown point.
Applying the same to the Bitcoin chart brings its downside target to as low as $88,000, as shown below.
The bearish scenario will be invalidated if Bitcoin holds strong above its 50-day exponential moving average (50-day EMA), a strong support zone during BTC’s 50%-plus rise since April.
In that case, the price will likely rebound toward the wedge’s upper trendline at around $125,000 by September.
Bitcoin double-top scenario hints at $94,750
Bitcoin’s weekly close reflects a potential double top, similar to 2021, 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.
A similar setup now raises short-term downside risks unless the price reverses quickly, according to analyst Swissblock.
Bitcoin risks falling toward its 50-day EMA (the red wave) at around $94,750 by September, if the double top scenario plays out as it did in 2021.
The 50-week EMA has acted as a strong accumulation zone since June 2023.
Top Bitcoin cohorts are unloading BTC
Bitcoin onchain metrics further heighten the possibility of more price declines in the coming weeks.
The number of mega whale addresses holding over 10,000 BTC has dropped to its lowest level this year, with a sustained negative 30-day change since mid-July, according to data resource Glassnode.
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 and weakening technicals, this whale-driven selling pressure increases the risk of a broader pullback unless strong spot demand returns.
Potential Fed rate cut may offset downside risks
There’s one big difference between the 2021 and current BTC price cycle.
In 2021, Bitcoin peaked just as the Federal Reserve began tapering and shifted toward quantitative tightening (QT). This time, odds favor a 25-basis-point (bps) Fed rate cut in September, according to CME data.
Additionally, a persistently growing global money supply (M2) hints at a $132,000 price target for Bitcoin in the coming months. Some even predict the BTC price hitting $170,000.
Related: Bitcoin and inflation: Everything you need to know
Such a liquidity shift could counterbalance technical weakness in the short term, keeping BTC’s broader uptrend intact, Swissblock says.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.