Bitcoin’s recent rebound of around 18.50% after hitting a six-month low of approximately $49,755 has sparked optimism among investors. However, there are signs that the cryptocurrency may undergo further correction in the coming weeks. A key factor is the high percentage of long-term Bitcoin holders currently in profit. As of August 16, nearly 83% of these investors, who have held Bitcoin for more than 155 days, are in a profitable position. Historically, such conditions often lead to profit-taking, which could push BTC prices lower.
BTC/USD daily price chart. Source: TradingView
Technical Patterns Suggest Potential Downside
Bitcoin’s price movements are currently forming an ascending triangle pattern, which can indicate either a reversal or continuation of a downtrend. If Bitcoin fails to break above the resistance level at around $59,280 and instead breaks below the rising trendline, it could signal a continuation of the downtrend. In this scenario, Bitcoin’s price could fall towards the $50,000 level, which also serves as a psychological support point.
Bitcoin long-term holder 30-day average percent supply in profit. Source: Glassnode
Bullish Indicators Offer Hope for Recovery
Despite the risks, Bitcoin may not crash after all. Ascending triangles are typically bullish reversal patterns in a downtrend, meaning a successful close above the 50-4H EMA could propel Bitcoin toward the triangle’s upper trendline, around $59,240. If Bitcoin breaks above this upper trendline, it could trigger a rally towards $70,000.
BLX vs. Gold daily price chart comparison. Source: Charles Edwards
This bullish outlook is supported by Charles Edwards, founder of Capriole Investments, who notes that Bitcoin’s price movement often lags behind gold by a few months. With gold already breaking out of its consolidation phase, Bitcoin may follow suit.
Rate Cuts Could Boost Bitcoin
Moreover, potential interest rate cuts by the Federal Reserve could further enhance Bitcoin’s upside potential. Lower rates typically reduce the appeal of yield-bearing assets like US bonds, increasing the demand for riskier assets, including cryptocurrencies.
