Bitcoin Faces Renewed Correction Risk as TD Sequential Sell Signal Aligns with Historically Weak August

Bitcoin (BTC) may be headed into another challenging August after a technical sell signal appeared on its three-day chart, just as the cryptocurrency enters a month that has consistently produced losses in recent years. The convergence comes at a delicate moment for the broader digital asset market, where seasonal trading patterns and technical indicators often shape short-term sentiment.

TD Sequential Flashes Sell Signal

Market analyst Ali Martinez highlighted the warning in an X post on July 31, noting that the TD Sequential indicator had printed a "9" sell signal on Bitcoin's three-day chart. The signal emerged after BTC climbed toward the $65,000 area during July, signaling potential trend exhaustion and weakening bullish momentum.

Developed by market timing specialist Tom DeMark, the TD Sequential is widely used by traders to identify possible trend reversal points by counting consecutive price candles that meet specific criteria. A completed "9" count typically suggests an uptrend may be losing steam, though the indicator is generally treated as one input among many rather than a definitive forecast. When the signal flashed, Bitcoin was trading around $63,886, below its recent rally peak.

August's Persistent Weakness

Historical data compiled by Martinez shows that August has been one of Bitcoin's worst-performing months in recent years. The cryptocurrency has posted losses in every August since 2022:

• August 2022: −13.88%
• August 2023: −11.29%
• August 2024: −8.60%
• August 2025: −6.49%

August hasn't been kind to Bitcoin. Over the past four years, $BTC has posted an average decline of 10% during the month. Will this August break the trend? pic.twitter.com/ELkMVc5BiI — Ali Charts (@alicharts) July 31, 2026

Across the last four August trading periods, Bitcoin has declined by an average of approximately 10%, making it one of the weakest seasonal stretches for the digital asset. The pattern is not unique to crypto—traditional equity and commodity markets also tend to experience thinner summer liquidity as institutional participants reduce activity, which can amplify price moves in either direction. While past performance does not guarantee future results, the consistency of these declines has drawn attention as market participants assess Bitcoin's near-term outlook.

Converging Bearish Signals

The combination of August's historically weak performance and the TD Sequential sell signal creates a challenging setup for bulls. If seasonal trends persist and the indicator proves accurate, Bitcoin could face additional downside pressure, with traders watching support near $63,000. A break below that level could open the door to a deeper pullback, although strong market catalysts—such as shifts in macroeconomic policy, regulatory developments, or large-scale institutional flows—could still invalidate the bearish scenario.

Bitcoin Price Analysis

At press time, Bitcoin was trading at $63,423, up 0.65% over the past 24 hours. On the weekly chart, however, BTC remained down approximately 1.5%.

From a technical standpoint, Bitcoin is trading slightly above its 50-day simple moving average (SMA) of $63,423, indicating that short-term momentum remains relatively stable. Nevertheless, the asset remains well below its 200-day SMA of $71,335, a level widely regarded by technical analysts as a dividing line between bullish and bearish broader trends. The gap between the two moving averages underscores the distance Bitcoin would need to recover to reestablish a decisively bullish posture.

The 14-day relative strength index (RSI) stood at 43.87, a neutral reading with a slightly bearish tilt. This level suggests that selling pressure has eased, but buying momentum remains insufficient to signal a sustained recovery. Traders generally watch the RSI for moves below 30 (oversold) or above 70 (overbought) as potential inflection points, meaning the current reading leaves room for movement in either direction.