Bitcoin Technical Analysis: Market Outlook and Potential for Deeper Correction on September 7, 2025 Bitcoin, the undisputed king of cryptocurrencies, never fails to keep traders and investors in a constant state of flux. As of September 7, 2025, the market is rife with volatility, and the fundamental question on everyone's mind is: Where is Bitcoin headed next? Is the current slide merely a temporary, healthy dip, or the prelude to a deeper, more prolonged correction? To accurately ascertain Bitcoin's current trajectory, we must meticulously examine the charts, key structural levels, and technical indicators, evaluating the evidence for both bullish and bearish scenarios. Analyzing Key Levels: Standing Firm Against Selling Pressure Currently, Bitcoin's price is hovering around $112,430, but the preceding weeks have been characterized by a significant rollercoaster ride. After hitting a recent all-time high (ATH) near $125,000, the price has experienced a notable pullback, actively testing crucial support zones. The $110,000 to $112,000 range stands out as an exceptionally strong support level, a zone from which Bitcoin has decisively bounced multiple times in the past. Maintaining price stability above this band is paramount for staving off a sharp decline. This range is both a major psychological threshold and a significant technical structural support. Should the critical $110,000 support level be broken with conviction and high volume, the selling pressure is highly likely to accelerate, potentially pushing the price toward $105,000 or even the major psychological support at $100,000. Conversely, the primary overhead resistance is located in the $116,000 to $118,000 zone. A definitive, high-volume break above this range would invalidate the short-term bearish structure and pave the way for a renewed assault on the $125,000 ATH. Momentum Indicators: The Temporary Reign of the Bears The Relative Strength Index (RSI): The 14-period RSI on the daily chart is currently positioned around 41, strongly signaling a dominance of selling pressure but not yet having entered the oversold territory (below 30). This suggests that sellers are still firmly in control, but a potential bullish reversal could be imminent if the $110,000 support holds firm. However, as long as the RSI remains below the 50 centerline, the technical bias remains structurally bearish in the short term. Any divergence in the RSI, such as a Bullish Divergence (price prints a lower low, but RSI prints a higher low), would be an early indicator of a potential recovery. Moving Averages (MAs): The moving averages add to the cautionary tale. Bitcoin recently breached its 50-day Moving Average (MA-50) for the first time since July 2025, indicating a structural shift from bullish to bearish momentum on the short-to-mid term. However, the 100-day Moving Average (MA-100), situated near $112,000, is currently acting as a dynamic support level. A successful bounce from this MA-100 could ignite a short-term recovery, emphasizing the critical nature of this price confluence. Should the price consolidate below both the MA-50 and MA-100, pressure on the long-term bullish structure would intensify. Moving Average Convergence Divergence (MACD): The MACD confirms the prevailing bearish trend. The MACD line is positioned below the signal line, and the histogram is negative, which is a classic bearish signal. However, if the MACD lines begin to converge (draw closer together), it could signal a reduction in selling pressure and preparation for a bullish crossover. Traders should watch closely for any signs of a Hidden Bullish Divergence, which would indicate underlying buying strength. Price Patterns and Volatility: The Threat of the Head and Shoulders Pattern Head and Shoulders Pattern: A key point of technical debate revolves around a potential Head and Shoulders (H&S) bearish reversal pattern forming on the 8-hour chart. This classic bearish pattern is characterized by three peaks, with the middle peak (the head) being higher than the two side peaks (the shoulders). The critical Neckline of this pattern sits dangerously close to $112,500, and a convincing break below it would formally confirm a significant downward move, with the measured move target potentially driving the price toward the $100,000 area. Conversely, a strong rally that manages to break and sustain itself above the $116,000 resistance zone would effectively invalidate this H&S pattern, clearing the path for a new bullish wave. The Bollinger Bands (BBs) indicate that the price is currently testing the lower band, which, in the context of a longer-term uptrend, can sometimes be interpreted as a potential buying signal, but only if confirmed by an immediate volume bounce. Increased trading volume during the price decline suggests sellers are in control, but a decrease in volume on the support test could indicate a drying up of selling pressure. External and Fundamental Factors: Monetary Policy and Market Dominance External and fundamental factors continue to complicate the technical picture. News surrounding the Federal Reserve’s monetary tightening policies, particularly any indication of sustained interest rate hikes to combat global inflation, tends to inject caution into the high-risk asset market like Bitcoin. Global economic uncertainty prompts investors to realize profits and exit volatile assets. Concurrently, Bitcoin Dominance within the wider crypto market has been slightly declining, suggesting that capital is rotating into altcoins. This rotation could potentially ignite an Altcoin Season. While some analysts believe a broad altcoin rally could eventually propel the entire crypto market, including Bitcoin, higher, the drop in dominance during a corrective period could also be interpreted as a waning of confidence in the market leader. Long-term fundamental drivers, such as the fixed supply, halving cycle, and growing institutional adoption via Bitcoin ETFs, provide a strong floor beneath the price action, preventing a catastrophic long-term collapse. Trading Strategy and Comprehensive Risk Management Bitcoin's market is currently in a highly sensitive corrective phase. For short-term traders, this presents a high-risk opportunity to buy near the critical support at $110,000, but extreme caution is required. Placing a strict Stop-Loss order immediately below $110,000 is a necessary action to limit potential downside risk. A break of this level is the ultimate bearish confirmation. Long-term investors should, conversely, wait for stronger confirmation of a reversal, such as a definitive breakout and sustained close above $116,000 or a return above the MA-50. Technical analysts typically advise that in corrective markets, traders should seek double confirmation and avoid emotional decisions. Key Fibonacci Retracement levels from the ATH to the recent low provide major resistance targets at $114,000 (0.382) and $116,500 (0.5), a break of which would confirm a shift back to the bullish scenario. Ultimately, Bitcoin remains a volatile asset demanding meticulous analysis and rigid risk management. The current data leans toward a corrective phase, but the long-term bullish structure, underpinned by institutional adoption and scarcity, remains structurally intact. Traders must closely monitor the key levels and be fully prepared for both bullish and bearish eventualities. The key to success in this market is acting based on a disciplined strategy, not speculation.