Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Bitcoin faces a critical juncture this week, with traders and analysts warning that a failure to close above the $114,000 mark could trigger a significant “ugly” correction, potentially driving the cryptocurrency towards $103,000. This comes as Bitcoin has already lost a key support level, marking its third consecutive week of losses and trading 11% below its August 14 all-time high of $124,500.
Critical Price Levels and Analyst Warnings
The $114,000 level has been identified as a crucial support for Bitcoin over the past six weeks, and its recent breach has raised concerns among market participants. According to trader and YouTuber Sam Price, Bitcoin’s price must now reclaim and flip this level into support to reaffirm the strength of its uptrend.
Analyst Rekt Capital echoed this sentiment, emphasizing the importance of Bitcoin reclaiming $114,000 to avoid a prolonged correction period. Failing to do so, and turning $114,000 into new resistance, would likely extend the current pullback. The analyst noted that a weekly close above this level is essential for maintaining a bullish bias.
The $112,000 Threshold
Further compounding the bearish outlook, the $112,000 support level has also come under scrutiny. MN Capital founder Michael van de Poppe highlighted this level as “crucial” for BTC price, warning that an inability to hold above it could lead to a “very ugly correction across the board.”
As of Friday, Bitcoin had dipped below this $112,000 support, validating a bear flag pattern on the four-hour chart. This pattern typically suggests a continuation of bearish momentum, indicating that sellers are currently in control of the market.
Bearish Indicators and Potential Targets
The validated bear flag pattern suggests a measured move target, indicating a potential decline toward $103,700. This represents a roughly 6% drop from the current trading levels, according to the analysis.
Adding to the bearish signals, the relative strength index (RSI) remains below the mid-line, which further confirms the prevailing downward momentum. Liquidation data also shows significant bid clusters extending down to $104,000, implying that the BTC price may continue to fall to capture liquidity at these lower levels.
In summary, Bitcoin’s immediate price action hinges on its ability to reclaim and maintain critical support levels, particularly a weekly close above $114,000. Failure to do so, especially after breaking below $112,000 and confirming a bear flag, could pave the way for a deeper correction towards the $103,000 mark as bearish sentiment and technical indicators align.
