Bitcoin price took a wrong turn on July 30, right after the hyped Bitcoin conference. The asset formed a bearish reversal pattern, dropping from $70,000 to its current price of $61,938. The price of BTC dropped 1.5% in the last 24 hours, but technical analysis shows that the asset may drop further.
Bitcoin Price Crash Not Yet Done
The current trend for BTC is bearish. The price has formed a double-top pattern, indicating a potential further decline. The price is currently below the 50-day EMA but above the 200-day EMA, signaling a bearish short-term outlook.
The formation of the double-top pattern indicates a bearish reversal, suggesting a 10% extended loss if the price breaks below $59,000.
The key support levels for BTC price action are at $55,535.50 and the lower boundary of the horizontal range at $59,000. The fair value gap (FVG) around $47,000 to $48,000 may also act as strong support if the price continues to decline. On the flip side, there is resistance at $64,351.01 (50-day EMA) and $62,000.
The Relative Strength Index (RSI) is at 42.37, approaching oversold territory but not yet indicating a reversal. This suggests that there may be room for further downside. The Chaikin Money Flow (CMF) is at 0.11, indicating a slight positive money flow but not strong enough to counter the bearish sentiment.
The trading volume has increased slightly, supporting the bearish breakout below the neckline. Continued high volume would confirm the strength of this downward movement.
Historic August Crash Repeating: 2024 Cycle vs. 2016 Cycle
One characteristic of the 2016 bull cycle is that it maintained above the 200 SMA during the whole cycle. Following the bear market, #Bitcoin recovered above the 200 SMA on October 16, 2015, and treated it as a support for ~2.3 years, ending in January 2018 with a blow-off top of around $19,800.
Interestingly, this pattern repeated recently in October 2023 when #BTC crossed above the 200 SMA. This marked the start of the 2024 bull cycle that could continue and end in January 2026 with a blow-off top.
2017 also shows some similarity with 2024, when Bitcoin made a slight new ATH in March before the correction. The same thing happened in March 2024. In 2016, there was a post-halving correction, similar to the 2024 post-halving dip in the first week of May.
Additionally, in 2016 (August 2), there was a flash crash to back-test the 200 SMA. Going further back to the previous halving year, 2012 (August 19), there was also another crash.
Further historical analysis revealed a similar pattern of August flash crashes in:
- – 2011 (August 6)
- – 2014 (August 14)
- – 2015 (August 18)
- – 2022 (August 19)
- – 2023 (August 17).
What all these August crashes have in common is the New Moon — they all occur during this time. If the pattern repeats in this cycle, you may want to be cautious in August around the new moon, which is on August 4.
Last Dip Before Historical Bull Run?
In 2016, from the halving until the end of the post-halving correction marked by price break out, it was 4 months (~145 days). If the same pattern repeats, Bitcoin may begin breaking out around this date: September 10 (second week).
