Bitcoin's Price Plunge: Is a Deeper Correction on the Horizon? Bitcoin's recent price action has left investors on edge, with the cryptocurrency dipping below the crucial $115,000 mark for the first time in weeks. While a quick bounce back has provided a glimmer of hope, leading analysts are warning that the flagship digital asset may be entering a significant corrective phase, potentially facing a 15%-25% pullback.
Current Market Dynamics and Bearish Signals
On Monday, Bitcoin (BTC) tested the $114,500 support level after falling below $115,000. Despite a subsequent bounce that saw it reclaim $116,500 and approach $117,000, market watchers remain cautious. Since August 7, BTC has largely been trading within a range, reaching an all-time high (ATH) of $124,200 before being rejected from its upper limits. According to analyst Ali Martinez, this recent rejection signals a "deviation," often preceding weakness and deeper pullbacks. Furthermore, on-chain data indicates a worrying trend: the Accumulation Trend Score has plummeted to 0.20. This suggests that instead of accumulating Bitcoin at current levels, holders are actively redistributing their assets, implying a lack of strong buying conviction. Should bearish momentum intensify, the $112,000 level is identified as the next critical support, with a failure to hold it risking a $4,000 drop towards the $108,000 area, where significant liquidity lies.
Historical Precedent and Projected Correction
Another analyst, Rekt Capital, pointed out that Bitcoin failed to maintain the crucial $119,000 weekly support, concluding Sunday's trading session below a key weekly bull flag pattern that had been developing since early July. This breakdown is a significant bearish indicator. If the pattern's previous support now acts as resistance, it would confirm the breakdown and likely lead to a retest of the $112,000 region. Rekt Capital further highlighted that Bitcoin has entered its second Price Discovery Correction (PDC), historically following the second Price Discovery Uptrend peak, which typically occurs between weeks 5 and 7 of the cycle. Analyzing past cycles (2017 and 2021), pullbacks after similar uptrends lasted between one and three weeks, with declines of 25% and 29% respectively. While acknowledging these historical patterns, the analyst suggests that the current correction might be "shorter and shallower" than previous ones, ideally resolving within the next few weeks with a pullback in the range of -15% to -25%. This implies that while a decline is expected, its severity might be less pronounced than in prior cycles.
