Last week, a sequence of eight positive changes in the price of bitcoin (BTC) was interrupted, and it fell below the important horizontal zone and the Fibonacci resistance level.
Bitcoin failed to close above the specified resistance level.
The weekly chart shows that since October last year, the price of bitcoin has been growing quite rapidly. During this period, BTC reached a new annual high, reaching $44,730. This value exceeded the horizontal resistance and the key Fibonacci level. At this time, bitcoin has demonstrated eight consecutive weeks with a positive price change.
However, last week there was a price pullback, which was reflected in the chart of the first week with a negative price change since the beginning of the upward movement. This event caused bitcoin to fall below the key resistance level, which may indicate that the uptrend was a temporary phenomenon.
The relative Strength index (RSI) is still above the 50 mark, but has reached the overbought zone. Although it has declined slightly, it has still not dropped below 70, which can be considered a sign of a negative price change.
Analysts' opinion
The opinion of traders and analysts on the X platform is currently leaning towards a negative view of the short-term trend of bitcoin.
IncomeSharks notes the presence of a "gap" on the CME in the region of $40,000 and assumes that it will be filled.
Rager claims that the price will return to testing its moving average, as the current upward movement is considered too far away. He notes:
"Every uptrend of bitcoin throughout the year is always accompanied by a correction that has tested several key moving averages. Since October, bitcoin has been in a pronounced uptrend and should probably return to the average level. A drop in the price below $40,000 should not be alarming, as this may be a healthy correction before further growth in the first quarter of 2024."
Finally, CredibleCrypto looks at the short-term from a negative perspective due to the results of the wave analysis, but suggests that another increase may occur before a major correction.
BTC Forecast: Has the correction started?
According to the results of Elliott wave analysis, the most likely scenario is the beginning of the fourth wave within the framework of a five-wave upward movement. It is noticeable that the third wave was extended, and its subwaves are indicated in black on the graph.
Since the daily RSI shows a significant negative divergence, it is likely that the third wave has already ended. A negative discrepancy occurs when a price increase is accompanied by a decrease in momentum. This often leads to lower prices.
However, if the bitcoin price continues to rise above the annual maximum, this may indicate the completion of the correction, and this may lead to a 23% increase to the next long-term resistance level at $50,500.
