Bitcoin loses key support! This week's close becomes a watershed for bulls and bears, as the bull flag pattern breaks, raising concerns about the trend | BTC price prediction

Bitcoin (BTC) is attempting to rebound after breaking through a key support area, but analyst Rekt Capital warns that this week's performance will determine the medium-term trend direction. BTC dipped to a low of $112,296 over the weekend, breaking below the $114,000-120,000 consolidation range that had been maintained for three weeks since breaking out in early July, and more critically, it fell below the lower edge of the "bull flag" pattern on the weekly chart (around $117,200). If it fails to close back within this pattern by the end of the week, it would confirm the breakdown as valid, potentially further dipping to the $112,000 support; conversely, if it can recover, it would be seen as a "false breakdown," and the upward trend would likely continue. The closing result of this week will also determine the fate of BTC's second round of "price discovery rising phase" (PDU2), with historical patterns indicating that weeks 5-7 are a dangerous area.

Key support lost, bull flag pattern in jeopardy Bitcoin (BTC) price is trying to recover some ground after breaking a key support level. However, well-known analyst Rekt Capital points out that this week's price performance will play a decisive role in the next phase trend of the cryptocurrency.

Last weekend, Bitcoin fell below its breakout range (114,000-120,000 USD) for the first time since breaking out in early July, reaching a local low of 112,296 USD on August 3. Previously, BTC had set a historical high (ATH) of 122,838 USD in July. As the end of July approached, BTC's volatility increased, and it tested the lower support of the range twice in the last week. However, unlike the rebound of the previous weekend, BTC ultimately lost this key area completely on August 1.

Rekt Capital analysis points out that the rise of Bitcoin may face risks. BTC once formed a bullish "bull flag" pattern on the weekly chart and has been holding the low point of this pattern (around the $117,200 area) as a support until the recent weekly close fell below it. Analysts believe that this week's price performance is crucial, as it will reveal:

1. Bearish Scenario: Will the pattern bottom (~117,200 USD) transform into a new resistance level, thereby confirming an effective breakdown, and possibly lead to the price dipping again to test the 112,000 USD area as support.
2. Bullish Scenario: Can BTC price successfully recover within this structural formation? If so, the recent dip can be seen as a "Fake Downside Deviation," after which the price will align upward with the original bullish pattern.

This week's closing determines the fate of "Price Discovery Phase 2" Rekt Capital further elaborates that this week's performance will determine the future direction of Bitcoin's second "Price Discovery Uptrend" (PDU2). Technically, this rise has entered its fifth week.

Based on the evolution results of the "bull flag" pattern (successfully reclaiming the interior of the pattern or confirming a valid breakdown), we will be able to determine whether PDU2 will continue, or if BTC has actually experienced an unusually brief PDU2 (lasting only about 2 weeks).

Analysts warned last week that as BTC enters weeks 5 to 7 of this phase (historical patterns show that the second round of price rises often starts to slow down in weeks 5-6 and peaks in this "Danger Zone"), the continuation of the price discovery trend may face the risk of failure.

• Conditions for Continued Rise: If Bitcoin successfully recovers the bull flag pattern and challenges new highs, its second round of price discovery rise will continue to advance according to historical patterns.
• Signal of Trend Termination: If BTC fails to close above the pattern bottom (~117,200 USD) this week and confirms further downside, it means that the second round of price discovery upward (PDU2) has ended in the second week, which is much shorter than any round in history. More seriously, this will reveal that BTC has actually entered its second round "Price Discovery Correction Phase," which "will be completely contrary to historical patterns."

Macroeconomic Perspective: The Third Round of Pumping Still Holds Potential Rekt Capital points out from a macro perspective that Bitcoin still has ample time to prepare for a possible third round of price discovery rise (PDU3). If the second round of the rising phase has indeed ended prematurely, then the final third round of the rise could significantly pump to make up for the shortcomings of the current round's poor performance.

Previously, the analyst stated that the development after the second round of rise will depend on the duration of the pullback phase - a brief pullback may create an opportunity for the third round of rise before the bear market begins.

Conclusion: Bitcoin is currently at a critical technical crossroads. Losing the lower edge of the bull flag increases short-term risks, and whether it can close above $117,200 this week will be a key indicator for assessing the strength of the mid-term trend. This is not only related to the short-term conversion of bullish and bearish forces but also involves the continuation of the second phase of price discovery and upward movement. Investors need to closely monitor the closing results this week. If a breakdown is confirmed, they should be wary of the risk of a dip to the $112,000 support; if it can recover strongly, historical patterns suggest that the upward trend still has resilience. Macro-wise, even if this round of increase ends prematurely, the potential for a third upward phase still offers a glimmer of hope for long-term holders.