Summary: Is Bitcoin’s Price Discovery Rally Over? This Week’s Performance May Hold The Answer

Bitcoin (BTC) is currently navigating a critical period, with its performance this week poised to determine the future of its ongoing price discovery rally. After dipping below a significant support level, the flagship cryptocurrency is fighting to reclaim lost ground, as market analysts closely watch for definitive signs of its next trend. Over the past weekend, Bitcoin broke its post-breakout range, falling to a local low of $112,296. This marks the first such breach in three weeks, following a period where BTC traded consistently between $114,000 and $120,000, even achieving an all-time high of $122,838 in July. According to analyst Rekt Capital, Bitcoin had formed a "bull flag" on the weekly chart, maintaining its pattern lows as support. However, its recent drop on August 1 suggests this crucial area around $117,200 could now transition into resistance, potentially confirming a bearish breakdown. The outcome of this week's trading will be pivotal for Bitcoin's second Price Discovery uptrend, which has technically reached its fifth week. Should BTC successfully reclaim the bull flag structure, the recent correction might be deemed a "fake downside deviation," allowing the uptrend to resynchronize with its historical progression. Conversely, if the $117,200 level holds as resistance, it would confirm a more significant breakdown, indicating an unusually swift end to this uptrend—much quicker than historical patterns suggest. Despite these immediate challenges, the broader macro perspective suggests Bitcoin still has room for a potential third Price Discovery uptrend, which could offset any current underperformance before a bear market eventually takes hold.