Bitcoin Faces Downside Risk in August as Analysts Spot Bearish Signals for BTC

A prominent analyst, known for accurate long-term crypto predictions, issues a warning about Bitcoin (BTC) as it shows a signal that may lead the leading digital asset to lower price levels this month.

Renowned crypto analyst, Rekt Capital, with a substantial following of 349,300 users, cautions that historically, the month of August before Bitcoin's halving has been bearish for BTC.

The analyst highlights a potential bearish divergence in BTC's relative strength index (RSI) on the weekly chart, indicating a weakening momentum for the leading cryptocurrency. Rekt Capital suggests that if the resistance level around $29,250 holds, the likelihood of the bearish signal materializing increases. In such a scenario, Bitcoin could potentially drop to as low as $24,000.

Rekt Capital points out the relevance of studying past August downtrends, particularly in pre-halving years like 2015 and 2019, as 2023 is also a pre-halving year. Drawing from historical data, he presents two possible scenarios:

1. If Bitcoin follows the pattern of August 2015, the price might experience an 18% decline, reaching around $24,000.
2. If Bitcoin replicates the August 2019 trend, the price may only slightly dip by 4%, reaching approximately $28,000.

As per Rekt Capital's analysis, the presence of a weekly bearish divergence does not necessarily guarantee a decline in prices. He emphasizes that the bearish signal could be negated if Bitcoin successfully regains a crucial level or breaks the diagonal resistance of the RSI.

"The $29,250 level is currently acting as resistance for BTC.

If this trend persists, the likelihood of the weekly bearish divergence playing out increases.

However, if the price manages to reclaim ~$29,250 as support or if the RSI breaks its downtrend, it will invalidate the bearish signal."

At the time of writing, Bitcoin is trading at $29,127.

Aug 07, 2023