- Bitcoin reaches a vital point in its trend after a 5% correction.
- BTC’s ability to withstand the recent spike in profit-taking could see prices rise to $51,000.
- But further selling might lead to a downswing to $40,000.
Share this article
Bitcoin could soon define the direction of its trend as the $46,200 support level needs to hold for prices to rebound or break for a steep correction.
Bitcoin at the Crossroads
Bitcoin has posted significant gains over the past month, surging by more than 64%. The flagship cryptocurrency went from trading at a low of $29,300 on Jul. 20 and to hit a high of $48,150 on Aug. 14.
The upward price action seems to be contained within an ascending parallel channel. Each time BTC has risen to the channel’s upper or middle boundary since Jul. 20, a rejection occurs that pushes prices to the lower edge. From this point, Bitcoin tends to rebound, which is consistent with the characteristic of a channel.
Now, the pioneer cryptocurrency sits at a make-or-break point. A recent spike in profit-taking pushed BTC’s market value down by nearly 5% toward the channel’s support trend line.
If the market behavior seen over the past month repeats, the channel’s lower boundary could hold and serve as a rebound point toward the middle or upper trend line.
These critical resistance levels sit at $51,000 and $57,000, respectively.
Nonetheless, further selling around the current price levels might be significant enough for Bitcoin to break through the underlying support. A breach of the channel’s lower trend line at $46,200 projects a downward target equal to the width of this technical formation.
Under such unique circumstances, Bitcoin would likely retrace by more than 16%, targeting the psychological $40,000 support level.
Argentina May Adopt Bitcoin to Curb Inflation
Argentine president Alberto Fernández has made several positive comments regarding cryptocurrencies, suggesting that the country could adopt Bitcoin to curb its rampant inflation. Argentina Eyes Bitcoin Adoption Argentina joins the…
Bitcoin at Make-or-Break Amid JPMorgan Fund Reports
Institutional interest in Bitcoin is on the rise, with JPMorgan reportedly looking to launch an in-house Bitcoin fund for wealthy clients. Meanwhile, the charts show that BTC is at a…
Axie Infinity Generated More Revenue than Bitcoin, Ethereum in July
A groundbreaking month of July saw Axie Infinity earn more revenue than Bitcoin, Binance Smart Chain, Uniswap, and even Ethereum. Axie Infinity Is Exploding The heavily mediatized price rise of…