Bitcoin Faces Critical Support Levels Amid Market Correction
By: Eliza Bennet
Bitcoin (BTC) and Ethereum (ETH) faced a significant downturn as they opened the week with substantial losses. Data indicates that Bitcoin experienced a 3% decline, dropping from above $118,000 to around $115,303 at the time of analysis. Ethereum also followed a similar trend, decreasing by roughly 4% to $4,270, ending its streak of notable gains. The broader cryptocurrency market mirrored this decline, as top cryptocurrencies like XRP, Binance Coin (BNB), Solana, Dogecoin, and Cardano each reported average losses nearing 4%.
According to analysts from Matrixport, Bitcoin's current market position is characterized by uncertainty following a break below a long-term downtrend line. This unexpected movement has potential implications for Bitcoin's price, with projections suggesting a possible test of the $112,000 level ahead of the U.S. Federal Reserve's September rate decision. Traders are advised to adopt one of two strategies: either purchase on strength following a breakout or wait to accumulate nearer to the $112,000 threshold, as per Matrixport's recommendations.
Meanwhile, the annual Jackson Hole Economic Symposium, renowned for its potential market-affecting announcements, is unlikely to deliver significant guidance this year. Investors may instead look forward to the Sept. 17 Federal Open Market Committee (FOMC) meeting for clearer economic indicators. The recent market downturn has resulted in substantial liquidations; CoinGlass data reveals over $534 million in leveraged positions were liquidated, impacting over 127,000 traders. Ethereum traders suffered the most, with liquidations totaling $212 million.
Bitcoin's price trajectory is currently trending downward, with potential support levels being tested at $114,750 and $113,500. If Bitcoin does not manage to recover above the $118,000 resistance zone, it risks further decline toward the ominous $112,000 support level. Market analysts are keeping a close watch, as any break below this could see Bitcoin descend further toward $110,000.
