Bitcoin (BTC) is facing increased downward pressure as it dropped below the critical 200-day EMA for the third time in August, raising concerns among traders. After a recent correction from $65,000 to $58,000, the cryptocurrency’s ability to recover in the near term is being questioned.
Immediate Recovery at $58K?
Currently hovering above $60,000, Bitcoin could experience a short-term bounce if market volatility swings in its favour. BTC is showing higher highs and higher lows on the 4-hour chart, and it remains within an ascending pattern, offering a glimmer of hope for bulls. Should Bitcoin reclaim $61,120 quickly, it might renew bullish momentum and push towards $65,000.
BTC/USDT on the 4-hour chart. Source: TradingView
Data from CoinGlass indicates that the open interest-weighted funding rate for Bitcoin remains positive, reflecting some bullish interest from derivatives markets. However, the prospect of a strong recovery remains uncertain as September approaches — historically a challenging month for Bitcoin, with the lowest return on investment (ROI) average over the past decade.
Risk of Correction to $54K
If Bitcoin fails to maintain its $60,000 support, a more substantial correction down to the $54,000-$52,000 range could be on the horizon. A liquidity sweep at $53,500 would add to the pressure. Earlier this month, when Bitcoin dipped to $49,000, it closed just above $54,000, indicating strong buy orders around that range.
BTC/USDT on 1-day chart. Source: TradingView
Bitcoin researcher Axel Adler highlights $54,700 as a crucial level, marking a 15% deviation from the short-term holders’ cost basis. Falling below this key level could increase bearish sentiment and lead to further declines.
Possible Dip to $49K
In a worst-case scenario, Bitcoin could drop to $49,000, representing an 18% correction over the coming weeks. This level would test a long-term order block between $47,000 and $50,500, supported by both the 50-day and 100-day EMAs. Historical data shows that price levels above $45,000 have strong support, which could act as the final defense before a potential bullish recovery in Q4.
