The second half of August was tough for Bitcoin and the broader crypto market. After reaching a new all-time high of around $124,000 on August 14, the BTC/USD price dropped by about 13% before the month ended.

There are a few possible reasons for this pullback. Many investors still see cryptocurrencies as risky, and recent economic signs in the US didn’t help that perception:

– The US economy showed signs of stagflation — meaning job growth slowed while inflation stayed high. That’s usually bad news for riskier assets like Bitcoin.
– At the same time, media outlets warned that markets might be overheating, with some pointing to a possible bubble forming due to the growing hype around AI technologies.

Earlier in August, we looked at Bitcoin’s price pattern and extended a long-term upward trend line (shown in blue on our charts). At the time, we suggested that BTC might try to beat its previous highs — which it did. But now, the big question is: what happens next?

That upward blue channel has been holding strong since spring 2025. However, we’re now also seeing signs of a downward trend (marked in red), which could mean sellers are starting to gain control again. This makes the price action more uncertain.

One key price level to watch is $109,000. In mid-July, bears (sellers) tried to push prices below this level but failed when Bitcoin surged higher. Since then, this level has become a battleground:

– On August 26, $109k acted as strong support.
– On August 29, sellers managed to break through it.
– Now, Bitcoin is back above $109k, forming a bullish “double bottom” pattern — a sign that buyers may be regaining strength.

Another encouraging signal is coming from the RSI (Relative Strength Index), which is showing bullish divergences — a technical sign that momentum might shift back in favor of buyers.

So what does all this mean? As long as BTC stays inside the blue upward channel and holds above $109k, it could continue trading higher. In the short term, Bitcoin might aim for the middle of the red downward channel — a possible recovery zone.

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Disclaimer: This content reflects the views of FXOpen brands and should not be considered financial advice or a recommendation to buy or sell any financial product.