Bitcoin is testing a critical ascending trendline near $117,500 after failing to sustain above the 50-EMA at $118,797 and 100-EMA at $118,512. The chart pattern has narrowed in a rising wedge, generally viewed as a precursor setup for an abrupt directional change in crypto markets.
Candlestick patterns are neutral, and consecutive spinning tops and dojis imply indecision following rejection at $122,400. The RSI is 41, having recovered from oversold positions but still being weak, indicating bulls are still uncertain. Sentiment in the market is such that Bitcoin is yet to recover higher resistance positions more decisively.
The overall technical perspective is bullish so long as Bitcoin trades north of $115,893. Confirmation of a close above $118,500 could spur a rally towards $120,400 and $122,400. Alternatively, a decisive fall below $115,893 risks losses towards $114,200 and conceivably $111,300, anticipating a key support-resistance contest.
Historical cycles point to September risk
Crypto analyst Benjamin Cowen has shared a recurring post-halving cycle pattern that could shape Bitcoin’s coming months. His analysis highlights seasonal tendencies, with rallies through July and August often followed by sharp September crashes. Historical fractals suggest caution despite ongoing strength in recent sessions.
The chart of Cowen shows recurring mid-summer rallies giving way to September corrections before the ultimate cycle peaks. Such a pattern materialized in 2013, 2017, and 2021, where the initial strong bullish sentiment gave way to temporary losses. Each cycle then proceeded towards a last top in the fourth quarter.
According to his review, the strength in Bitcoin in July and August is in sync with the periodic pattern. Traders are concerned that September can accommodate a corrective move before a higher push. Such action would be typical in the past, following the periodic cycle that has been a characteristic of past halving patterns in the markets.
Bitcoin cycles suggest market growth potential
Market expert TechDev offered another perspective, suggesting the market remains far from its ultimate all-time high. His study indicates recurring long-cycle patterns, consistent in that every Bitcoin top occurs about fourteen months following a particular cycle signal, contradicting current sentiment regarding nearing exhaustion.
TechDev’s charts since 2011 reveal tops and bottoms with distinct red and green signals. Each cycle has proceeded in predictable manners: strong rally, sharp correction, and accumulation. He highlights that the average time between signals and peaks is 420 days, giving very good context for traders.
If the pattern is consistent, Bitcoin still could experience longer upside prior to a peak. History supports previous cycles in which advancement is longer-lasting than predicted, in which euphoria is seen following corrective action. Current trading in the $117,508 region is following a previous pattern, suggesting markets are not overheated at all.
