Bitcoin Weekly Forecast: BTC distribution cycle reaches its first target, here's what to expect next


  • Bitcoin price has broken below the 200-week SMA and a significant volume level, hinting at a renewed bearish regime.
  • A breakdown of $20,600 is likely to result in a crash to roughly $19,200. 
  • If BTC manages to flip the $25,000 barrier into a resistance level, it will invalidate the bearish thesis. 

Bitcoin price has kick-started a period of controlled selling and is currently approaching short-term support levels. A minor relief rally might occur – before the next leg down to inefficiencies and liquidity. Investors need to be cautious since the current down move has broken significant levels that could trigger a massive sell-off in the future. 

This article takes a top-down approach to where BTC could be heading next.

Bitcoin price in a tumble

Bitcoin price has been in a downtrend since its rejection at the $24,989 level. The volume profile between June 10 and August 19 shows that the highest traded level, aka Point of Control (PoC) – a key support and resistance level on the chart – has now shifted to $23,377.

This development indicates that a lot of capital came into the market after a brief move above the 200-week SMA. Yet now sellers seem to be triumphant after the breakdown of the PoC, as well as the 30-day Exponential Moving Average (EMA) at $23,226 and the 200-day Simple Moving Average (SMA) at $22,968.

This triple breakdown is a significantly bearish development and does not bode well for upcoming events.

BTC price has moved to the lower limit of its ascending parallel channel in search of support. The volume profile shows the possibility price could completely slice through the bottom of the channel and retest a support area, extending from $21,300 to $20,300.

Bears are likely to push Bitcoin price down to this level before taking a short break. From a price action standpoint, $19,248 represents a stable support level which extends to $18,608. 

So, from the perspective of a short-to-mid-term outlook, investors can expect a 15% crash, especially if the ascending parallel channel breaks down at $22,160. 

BTC/USDT 1-day chart

BTC/USDT 1-day chart

On the four-hour chart, Bitcoin price is in the second leg of its distribution phase, where it is developing the last point of supply zones and is heading toward the support levels at $22,600 and $22,382. 

Beyond these short-term support structures, Bitcoin price will aim to fill the price inefficiency aka Fair Value Gap (FVG) at $21,140 and potentially sweep the equal lows at $20,750. 

BTC/USDT 4-hour chart

BTC/USDT 4-hour chart

A quick look at IntoTheBlock’s Global In/Out of the Money (GIOM) model shows that the 2.6 million addresses that purchased roughly 1.54 million BTC are “At the Money.” Roughly two days ago, these investors were “In the Money” and were expected to cushion any sell-offs.

These addresses have purchased BTC at an average price of $20,366. So a breakdown of this level, which coincides with the technical forecasts, could result in a steep correction to $12,000 for BTC, as holders jettison their losing positions.

BTC GIOM 

BTC GIOM 

While things are looking awfully grim for Bitcoin price, the only way for bulls to invalidate the bearish outlook is if they can flip the $25,000 hurdle into a support level. This move will allow bulls a chance to muster at a price floor and then propel BTC to a new local high, ranging from $28,000 to $29,000.

 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Bitcoin Weekly Forecast: BTC nosedives below $95,000 as spot ETFs record highest daily outflow since launch

Bitcoin Weekly Forecast: BTC nosedives below $95,000 as spot ETFs record highest daily outflow since launch

Bitcoin price continues to edge down, trading below $95,000 on Friday after declining more than 9% this week. Bitcoin US spot ETFs recorded the highest single-day outflow on Thursday since their launch in January.

More Bitcoin News
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers

Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers

Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins. 

More Bitcoin News
Solana Price Forecast: SOL’s technical outlook and on-chain metrics hint at a double-digit correction

Solana Price Forecast: SOL’s technical outlook and on-chain metrics hint at a double-digit correction

Solana (SOL) price trades in red below $194 on Friday after declining more than 13% this week. The recent downturn has led to $38 million in total liquidations, with over $33 million coming from long positions.

More Solana News
SEC approves Hashdex and Franklin Templeton's combined Bitcoin and Ethereum crypto index ETFs

SEC approves Hashdex and Franklin Templeton's combined Bitcoin and Ethereum crypto index ETFs

The SEC approved Hashdex's proposal for a crypto index ETF. The ETF currently features Bitcoin and Ethereum, with possible additions in the future. The agency also approved Franklin Templeton's amendment to its Cboe BZX for a crypto index ETF.

More Cryptocurrencies News
Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy

Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy

Bitcoin price has surged more than 140% in 2024, reaching the $100K milestone in early December. The rally was driven by the launch of Bitcoin Spot ETFs in January and the reduced supply following the fourth halving event in April.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP