Analysis: Will Bitcoin take another dip towards $112,000?

Analysis: Will Bitcoin take another dip towards $112,000?
Bitcoin is in an uptrend and seems poised to rise further, but this usually doesn't happen without some corrections. Will it take another dip in the short term?

The BTC trend
To get a good overview of Bitcoin, we'll first look at the daily chart. Each candlestick represents a 24-hour period, allowing us to see a large portion of the price history. This gives us a good idea of the key price levels and the upward trend.

As you can see, BTC moved in a downward trend earlier this year. This is where a coin makes increasingly lower lows and increasingly lower highs (indicated by orange arcs). This usually results in a prolonged period of downward momentum that only stops when it breaks above a previous high.

Bitcoin rose above that previous high in April – near the red line of $88,700 – and then went up rapidly. The coin made a strong surge to $112,000, setting a new all-time high. But shortly afterward, we saw a similar pattern develop as earlier this year.

As you can see from the purple arcs, BTC began another downtrend of lower lows and lower highs, and this time, too, it needed to be broken. This finally happened on July 9th. The coin then rose above $110,500 and subsequently found enough buyers to break the all-time high at that time (purple line).

Is another drop to this price level imminent?
After that last break, Bitcoin reached $123,200, its highest price ever. To better see the price movements before and after this rise, we'll zoom in. We'll do this by looking at the 4-hour chart of BTC. Each candlestick represents 4 hours, allowing us to see the price in more detail.

After Bitcoin reached that high, too many sellers pushed the price back. It then seems we're seeing a repeat of the above – Bitcoin seems to be making lower highs and lower lows again.

We might therefore be close to a lower high (green question mark), and if this actually plays out – which is of course no guarantee – it would be logical if we also end up below the previous low. In that case, we need to look for a price level below that, and that seems to be $112,000.

It often happens that an old resistance level acts as support after a break. And if this trend continues, a drop to that level is certainly a conceivable scenario. In any other case, where the coin continues this rise and makes a higher high, the uptrend remains intact, and thus the expectation remains positive.