Bitcoin (BTC) Elliott Wave Analysis: Correction Developing With More Downside to Come

BTC Price Analysis

The daily chart shows Bitcoin completing an extended Wave 3 at $108,364 on Dec. 17, an all-time high. Price action formed an ascending channel indicating diminishing momentum and was likely an ending diagonal, signaling that the price reached its top for now.

A downturn followed, developing a corrective Wave 4 further confirmed by the breakout from the ascending channel support. This wave has retraced to the 0.236 Fibonacci level at $93,756 and after a bounce to the $102,500 area, it reverted again retesting the prior low.

These two movements could be interpreted as the finished A and B waves from the developing ABC correction with the price now likely continuing for its final leg down in Wave C.

The current price action suggests Wave 4 might retest lower Fibonacci levels, particularly the 0.382 at $85,200 or slightly lower at the 0.5 level at $79,965 which serve as key support zones.

Notably, the daily Relative Strength Index (RSI) remains neutral, providing room for further correction without entering oversold territory. A bearish divergence has been seen at its peak confirming that the price could be developing a notable correction.

Although we are expecting a short-term downtrend continuation, the broader bullish narrative remains intact. This will be in play as long as BTC maintains levels above $73,801, which represents a critical invalidation zone for the current wave count. A breakout above $102,709 would confirm the start of Wave 5, targeting new highs near $120,000 based on Fibonacci extensions.

BTC Price Prediction

The 1-hour chart reveals a lower-degree impulsive structure within an ongoing corrective sequence. BTC recently completed sub-wave B with a peak at $102,660 and proceeded to for the first sub-wave of the next five-wave move that is Wave C on the higher degree count.

The price is currently on the rise towards $95,000 area but this is counted as the lower-degree wave (ii). This means that the upside room remains limited and another downturn should follow shortly.

The projection suggests BTC will likely continue its decline toward $85,210, corresponding to the 0.382 Fibonacci retracement. A further bearish scenario could see BTC testing $83,651 (1.272 extension) or $80,775 (1.618 extension), aligning with Wave (v) completion. However, a short-term bounce from the oversold RSI condition could push BTC back to $96,986 or even $99,173 (0.236 Fibonacci) before resuming its decline.

In the bullish alternative, BTC would need to invalidate the current count by breaking above $99,173, which could indicate the start of a reversal into a new impulsive structure. Confirmation of this scenario would target $102,709 and beyond.

Key Levels to Watch

• Immediate Resistance: $96,986 (0.382 Fibonacci on 1-hour).
• Secondary Resistance: $99,173 (0.236 Fibonacci on 1-hour).
• Immediate Support: $93,433 (0.618 Fibonacci on 1-hour).
• Critical Support: $87,727 (0.382 Fibonacci on daily); $80,775 (1.618 extension).
• Invalidation Zone: Below $73,801 on the daily chart.

Conclusion

Bitcoin’s corrective phase on the daily timeframe and impulsive wave on the 1-hour chart provide a mixed outlook. While medium-term corrections are expected to find strong support above $73,801, the short-term bearish momentum may push BTC lower before resuming its uptrend. Traders should monitor Fibonacci levels closely, as they serve as critical support and resistance zones, with RSI signaling potential short-term pivots.