BTC Price Analysis: How Far Bitcoin’s Current Correction Will Last?

During the July end, the BTC price showcased multiple higher price rejections at the resistance trendline, indicating the traders are aggressive sellers at this barrier. As a result, the coin price plunged to $22600 support before reverting with a bullish engulfing candle. The coin price currently trades at the $23145 mark with an intraday gain of 0.85%, but will it sustain? 

Key points:

• The $22600 support breakdown may plunge the BTC price to 4%
• The 20-day EMA offers a viable support level
• The intraday trading volume in Bitcoin is $15.5 Billion, indicating a 27.58% loss

Source-Tradingview

The past two months’ recovery in the BTC/USDT pair is governed by an inverted flag pattern. However, this same pattern caused a 30% price drop after the first four months’ rally in 2022 and 40.5% after the mid-May-to-June recovery.

Therefore, despite the ongoing bull run, the BTC price is still poised for a significant correction.

On July 29th, the BTC price reverted from the resistance trendline, initiating a bear cycle within this pattern. The minor pullback plunged the prices by 5.5% as it reached the $22600 support. On August 5th, the local support aligned with the 20-day EMA stalls and the current correction with a 3% price jump.

However, under the influence of a bearish pattern, the BTC price should breach the $22600 support and plug into the lower ascending trendline at the $22000 mark. If the coin price breakdown from the support trendline, the inverted pattern would be completed and may witness a longer correction.

The resulting downfall may even plummet to the $18900 support.

On a contrary note, if the BTC price rebounds from $22600 and supports the trendline, the ongoing recovery would continue for a few more sessions.

Moreover, a bullish breakout from the overhead trendline would invalidate the bearish thesis.

Technical Indicator

EMAs: the rising 20-day EMA accentuates the ongoing recovery as it has flipped into viable support. However, along with $22600 support, the price will also break 20-day EMA, offering additional confirmation.

MACD indicator: a bearish crossover among the fast and slow lines gives a go signal for the current retracement. Moreover, a breakdown below the midline further reinforces the same cause.

• Resistance level- $24000 and $26000
• Support level- $22600 and $21000