Bitcoin (BTC) Elliott Wave Analysis: Descending Channel Breakout Expected

Bitcoin (BTC) is at a crucial juncture, showing potential for a breakout following a corrective wave. The larger trend structure indicates an ongoing Wave 4 correction, while the lower timeframe chart highlights the possibility of an impulsive move developing. Key Fibonacci levels and Elliott Wave counts provide a roadmap for the next price moves.

BTC Price Analysis

Bitcoin has been consolidating within a corrective Wave 4 structure after completing an extended wave 3 to a local high of approximately $108,400. The 4-hour chart reveals a well-defined ABC correction since Dec. 17, with the price currently oscillating within a descending resistance structure. This corrective movement is consistent with standard Elliott Wave principles, where Wave 4 often forms a sideways or downward consolidation before the final impulsive Wave 5.

The Fibonacci retracement levels highlight key support zones, with the 0.236 level at $93,260 and the 0.382 level at $85,512 acting as critical areas. A sustained hold above these levels would strongly confirm a higher low, supporting a bullish outlook.

The Relative Strength Index (RSI) remains neutral, neither overbought nor oversold, suggesting indecision among traders. However, volume analysis indicates decreasing selling pressure, which could hint at accumulation before a breakout. The primary resistance remains near $106,000, a key pivot level that must be cleared for further upside momentum.

Should Bitcoin fail to reclaim higher levels, deeper corrections could target the 0.5 Fibonacci retracement at $79,250 or even the 0.618 level at $72,988, which would signal an extended corrective phase before resuming its uptrend.

BTC Price Prediction 

Zooming into the 1-hour timeframe, Bitcoin appears to be forming the initial stages of a new five-wave impulsive sequence following its corrective Wave 4 bottom at $91,600 on Feb 3. The recent move from there to a high of $102,550 could be counted as sub-wave (i) of the developing larger Wave 5.

If this interpretation holds, the next pullback (Wave ii) should ideally find support near the 0.236 Fibonacci retracement at $97,250 before Wave (iii) extends towards the 1.618 Fibonacci extension at $111,715. The completion of Wave (iii) should be followed by a minor pullback (Wave iv) before reaching Wave (v), with an ultimate target around the 2.272 or 2.618 extensions ($118,560 – $122,182).

However, if Bitcoin fails to hold above the local trendline and breaks below $94,780, it could indicate further downside risk. In such a scenario, a retest of the $91,000 area level may be necessary before any sustainable bullish move occurs.

A breakout confirmation above the local descending resistance would add confidence to this bullish outlook, while a rejection at resistance and a drop below the current ascending trendline could signal a retest of deeper Fibonacci levels.

Key Levels to Watch

• Immediate Resistance: $98,778 (0.382 Fibonacci level)
• Key Resistance: $105,247 (1.0 Fibonacci retracement)
• Major Resistance: $111,715 (1.618 Fibonacci extension, potential Wave iii target)
• Immediate Support: $97,250 (0.236 Fibonacci retracement)
• Key Support: $94,780 (local structural support)
• Critical Support: $85,512 (0.382 Fibonacci retracement)
• Short-Term Target for Wave (v): Above $118,560 if bullish momentum sustains.
• Invalidation Zone: Below $94,780, signaling further downside potential.

The distinguishing factor between scenarios is whether or not the price of Bitcoin concluded its ABC correction on Feb. 3. Our current assumption is that it has which is why we are primarily anticipating an upward move, however, this might get invalidated as a rejection at key levels.

If the second occurs BTC could continue to lower values that $91,000 meaning that the correction since its December peak still has to develop fully before it can continue its upward trajectory.