Bitcoin price rising wedge breakdown: How low can BTC go?
News Summary
Bitcoin has corrected by nearly 8% since establishing its record high of over $124,500. Technical analysts indicate that Bitcoin has confirmed a breakdown from its rising wedge pattern and may be forming a double top pattern similar to 2021, signaling further downside risks. Potential support levels include the $110,000-$112,000 and $105,000-$108,000 ranges. Should selling intensify, Bitcoin could drop to the psychological $98,000-$100,000 zone by September, and even potentially extend declines to $88,000 as a downside target. Analysts also note that the number of mega whale addresses holding over 10,000 BTC has dropped to its lowest this year, and wallets holding between 1,000 and 10,000 BTC have also declined, reflecting profit-taking near recent highs. However, unlike 2021 when the Federal Reserve began tapering, current market odds favor a 25-basis-point Fed rate cut in September, and a persistently growing global M2 money supply could offset technical weakness, potentially keeping BTC's broader uptrend intact.
Background
Bitcoin has recently corrected by approximately 8% after hitting a new record high, exhibiting bearish technical patterns such as a rising wedge breakdown and a 2021-like double top. A rising wedge typically precedes price declines after a sustained uptrend, while a double top pattern signals weakening momentum. Whale activity (addresses holding significant amounts of Bitcoin) also indicates a selling trend, suggesting large holders are taking profits. However, unlike the Federal Reserve's tightening in 2021, current market expectations for September 2025 favor a Fed rate cut, and global M2 money supply continues to grow, potentially providing liquidity support for Bitcoin.
In-Depth AI Insights
To what extent can technical analysis predict movements in the cryptocurrency market? - The rising wedge breakdown and double top patterns highlighted are classic bearish technical signals that can indeed lead to short-term price declines. However, the cryptocurrency market, particularly Bitcoin, is highly volatile and heavily influenced by macro liquidity, market sentiment, and large institutional/whale activities. - Pure technical analysis often has limited predictive power in highly speculative and liquidity-driven markets. Macroeconomic cycles, interest rate policies, and global capital flows frequently play a more dominant role. The mention of a "potential Fed rate cut" in this article is a prime example of macro liquidity potentially offsetting technical signals. - For investors, this implies that over-reliance on a single technical indicator should be avoided; instead, it should be combined with the broader macroeconomic context, regulatory developments, and structural changes in the market for a comprehensive judgment. What does whale selling signify for the market, and what might be their underlying motivations? - A decrease in the number of whale addresses (wallets holding significant Bitcoin amounts) typically indicates large holders taking profits or reallocating funds, which indeed increases selling pressure and can lead to short-term price corrections. This is often part of market deleveraging and a healthy correction. - However, whale motivations can be complex: beyond simple profit-taking, they might be waiting for lower prices to re-accumulate, or diversifying funds into other crypto assets or traditional assets. This isn't always a long-term bearish signal but rather a normal capital rebalancing within market cycles. - Investors should look for signs of "accumulation" after whale selling, meaning whether large holders are re-entering the market after a price drop, which is key to identifying market bottoms and future trends. Has the Fed's policy influence on the cryptocurrency market now surpassed its impact on traditional financial markets? - While the Fed's policies primarily target traditional financial markets, their impact on global liquidity has become a critical driver for the cryptocurrency market, especially Bitcoin's price movements. When the Fed adopts an accommodative stance (like rate cuts), global liquidity increases, and some capital flows into higher-risk, higher-reward assets, including cryptocurrencies. - With increasing institutional participation in the crypto market, Bitcoin's correlation with traditional financial markets is continuously strengthening. Every policy shift by the Fed creates significant ripple effects in the crypto market, indicating that cryptocurrency is no longer a completely isolated market but an integral part of the global financial ecosystem. - Therefore, investors must consider the Fed's monetary policy expectations as a core factor when analyzing Bitcoin's trajectory.