Executive Summary
- Bitcoin’s current price uptrend is entering its seventh consecutive week, aligning with historical patterns that suggest a potential “price discovery correction” is imminent.
- According to Rekt Capital, Bitcoin’s post-halving bull markets typically see uptrends conclude between their fifth and eighth week, followed by a corrective phase.
- Analysts are watching for a potential price pullback, as September historically shows an average drawdown for Bitcoin, and the previous correction after the 2024 halving was approximately 30%.
The Story So Far
- The analysis of Bitcoin’s potential price correction is based on historical patterns observed in its post-halving bull markets.
- Past cycles indicate that Bitcoin’s price discovery uptrends typically conclude with a corrective phase between their fifth and eighth week, a timeframe the current uptrend is now entering.
Why This Matters
- Bitcoin’s current seven-week price uptrend indicates a potential “price discovery correction” is imminent, based on historical patterns in post-halving cycles.
- If historical trends repeat, Bitcoin may struggle to surpass its recent all-time high of $124,500 in the near term, limiting immediate upside potential.
- Investors should anticipate increased volatility and a potential drawdown in Bitcoin’s price, particularly as September historically shows an average price decrease for the cryptocurrency.
Who Thinks What?
- Popular trader and analyst Rekt Capital suggests that Bitcoin may be due for a “price discovery correction” as its current uptrend enters its seventh week, aligning with historical patterns of post-halving bull markets.
- Other analysts, including Daan Crypto Trades and data from CoinGlass, observe that while Bitcoin has seen positive performance in August, historical trends indicate a potential price drawdown for September.
Bitcoin (BTC) is approaching a critical juncture as its price uptrend enters its seventh consecutive week, prompting analysts to warn of a potential “price discovery correction” based on historical patterns. Popular trader and analyst Rekt Capital released new findings on Sunday, suggesting that Bitcoin may be running out of time to establish new all-time highs if it adheres to past cycles, with the price currently trading below $120,000.
Historical Precedent for Corrections
According to Rekt Capital, Bitcoin’s post-halving bull markets typically feature a series of price discovery uptrends, each followed by a corrective phase. Historically, the first such uptrend tends to conclude between its sixth and eighth week, while the second uptrend often ends between its fifth and seventh week. Bitcoin is now entering the seventh week of its second price discovery uptrend since the 2024 halving, aligning with the historical window for a potential pullback.
This analysis suggests that Bitcoin risks holding its recent all-time high of $124,500 in place if historical trends repeat. A linked chart from earlier in the year had indicated a potential upside target for this second uptrend at just under $160,000 before a correction.
Previous Cycle Corrections and Current Market Observations
Bitcoin’s first corrective phase following the 2024 halving saw the price drop from near $110,000 to under $75,000, marking a roughly 30% drawdown. This type of correction is not uncommon in previous halving cycles, providing a precedent for the current market conditions.
In related observations, fellow trader Daan Crypto Trades highlighted that BTC/USD has yet to record back-to-back “green” (positive performance) months for August and September. While a dip could occur, it might also set the stage for a larger cycle top later in the year.
Data from monitoring resource CoinGlass indicates that BTC/USD has already seen a 2.1% increase in August, slightly above its average of 1.8%. Conversely, September has historically delivered an average price drawdown of 3.8% for Bitcoin.
Outlook for Bitcoin’s Price Action
As Bitcoin enters the seventh week of its current uptrend, analysts are closely watching for signs of a potential correction, drawing parallels to historical patterns observed in post-halving bull markets. While current gains in August exceed historical averages, the looming possibility of a September drawdown, combined with the duration of the current price discovery phase, suggests increased volatility may be on the horizon for BTC.
