Bitcoin is likely undergoing a prolonged Wave 2 correction, potentially lasting four to six months and testing key Fibonacci support levels.
Elliott Wave Analysis
According to analyst Decode, Elliott Wave theory suggests Bitcoin is currently in a Wave 2 correction, invalidating the previous Wave 4 count. This shift in perspective raises questions about the extent of this correction and its impact on future price movements. If January marked the peak, Bitcoin might be in a larger-degree Wave 2, potentially extending another 4-6 months, possibly driving prices below the August 2024 lows.
Key Indicators and Fibonacci Levels
Bitcoin's price movements align with Elliott Wave theory, Fibonacci retracement levels, and established trend channels. The recent peak completed Wave 1, indicating an impulsive move. Now, the market is undergoing a corrective structure forming Wave 2. The price is currently near the 0.236 Fibonacci retracement level at $87,951. The strengthening correction involves support and resistance levels. Critical response points may be the 0.5 retracement level at $65,405 and the 0.382 Fibonacci level at $75,805. Bitcoin may drop to $51,121, the 0.618 Fibonacci level, if it continues to decline. Prices may reach the $35,562 0.786 level in the event of a larger correction.
Market Structure and Trend Analysis
Bitcoin's price follows an ascending channel, confirming prior bullish momentum. However, the corrective phase challenges this trend. Several trendlines highlight the broader bullish structure, with price currently testing key support zones. A breakdown below the existing trend channel could validate a deeper correction. Moreover, resistance levels remain crucial for determining future price action. Prior highs indicate significant reaction zones where Bitcoin could face selling pressure. The ongoing decline adheres to structured Elliott Wave counts, showing smaller sub-waves within the corrective phase. If the bearish scenario plays out, Bitcoin can anticipate extended consolidation before resuming an uptrend.
If the bearish scenario plays out, Bitcoin can anticipate a prolonged consolidation before a potential recovery. Decode suggests a potential reversal at key Fibonacci levels.
