**Reasons Why Bitcoin May Not Have Reached Its Lowest Point Yet**
Bitcoin experienced a slight recovery on August 20 but was still heading towards recording its worst weekly performance in two months.
**Bitcoin Hash Ribbons Signal a Potential Bottom**
Despite a 2.58% increase in BTC price to $21,372 per token on that day, the weekly returns were down by almost 14.5%, marking the worst performance since mid-August. However, on-chain indicators like Hash Ribbons, a metric analyzing Bitcoin’s hash rate to determine miner behavior, are hinting that the correction phase might be coming to a close. The miners seem to have stopped capitulating for the first time since August 2021, possibly switching the price momentum from negative to positive. Nevertheless, various negative indicators, including technical setups and exposure to macro risks, continue to weigh on Bitcoin, making a bearish trend a possibility despite upbeat on-chain metrics.
Here are three reasons why Bitcoin might not have reached its market bottom yet.
**BTC Price Breaks Down from Rising Wedge Pattern**
Bitcoin’s price decline this week led to a breakdown from a rising wedge pattern, indicating potential further losses in the weeks ahead. Rising wedges are typically bearish reversal patterns that form after a price increase within a narrowing, upward channel, resolving with a downside breakout that could push the price down significantly, possibly reaching the height of the wedge, which in this case points to a drop to around $17,600.
**Bitcoin Bulls Misreading the Federal Reserve**
Bitcoin saw a significant surge of about 45% during the formation of the rising wedge, with speculations around inflation peaking and the Federal Reserve possibly cutting interest rates by March 2023. Expectations were fueled by Federal Reserve Chairman Jerome Powell’s statement in July. However, the latest Fed dot plot suggests a path towards high rates by the end of 2023 and underscores the speculative nature of potential rate cuts, possibly influencing risk-on assets like Bitcoin for the years to come.
**Historical Patterns**
Bitcoin’s current price recovery runs the risk of being a false bullish signal, reminiscent of past rebounds during bear markets. Similar price increases during previous bear cycles ultimately led to significant drops, showcasing the precarious nature of such recoveries.
*Disclaimer: The views expressed are the author’s own and not endorsed by Cointelegraph.com. All investment decisions carry risks, so it’s essential to conduct thorough research before making any decisions.*
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