FX.co ★ Bitcoin can break the downward cycle or fall due to a correction: what is most likely to happen?

Bitcoin continues to move around the $48,000 mark, where the key resistance zone of the entire bearish trend passes. The cryptocurrency was approaching a difficult selling area but bounced back to the upper border of the support zone. As of 14:00 UTC, the asset continues to consolidate around $46,400. The coin steadily approached the long-term resistance zone, forming two highs at $46,200 and $37,300. However, bitcoin subsequently created another rally high at $48,200. The current price rebound will likely be the reason for a local correction with claims for a breakdown of the main growth range.

The market correction at this stage is quite logical and occurs within the upward trend from July 20. The cryptocurrency touched and bounced off the long-term downward trend that began with BTC's all-time high. In addition, the asset has formed a double top on the four-hour chart, which is also a prerequisite for a short-term correction. If this bearish pattern is realized, then blowouts could push the price to two key support levels. The first is at the midpoint of the growth range at $42,600. Here, a local upward reversal is possible, and if the bull manages to defend this line, the asset will quickly return to the growth zone. If this level is broken, the next support zone will be the level of $37,300, where a rising high was formed. Also, this area served as an excellent springboard and held bitcoin from breaking through to the middle of a wide range of fluctuations two months ago. If this zone is held, the market will receive a powerful bullish impulse and maintain the upward trend of July 20.

However, as of 14:00 UTC, technical analysis of the cryptocurrency points to pit weakening, which is a prerequisite for a powerful correction. The RSI has dropped past 40 on the 4-hour chart. The MACD continues its downward movement towards the zero level, and the stochastic has formed a bearish crossover and will soon leave the bullish zone. The weakness of bitcoin at the current stage indicates a strong resistance level that the asset is not ready to overcome. As a result, the bears will try to push the price as low as possible, but in any case, this stage should be viewed as an opportunity to buy more.

This is also evidenced by the daily state of technical indicators. The RSI is dipping into the 60 zone and the MACD indicates a continuation of the bullish momentum. At the same time, the stochastic gives clear signals for weakening. This may be an opportunity for the bears to aggravate the fall in bitcoin prices, but, most likely, sellers will not be able to push the asset below the long zone.

Bitcoin has shown clear signs of weakening over the past two weeks, but with the current market sentiment, the bears will only be able to profit locally from this correction. The cryptocurrency will hold one of two key support levels, consolidate and resume its upward movement. The market is dominated by restrained optimism, which indicates a willingness to wait and buy. Taking this into account, we expect a systematic waiting for an ideal position to buy back the next downward phase and further breakout to $46,400.