Bitcoin (BTC) Elliott Wave Analysis: Price Down 22% In February — Long-Lasting Correction Might Be Over

Bitcoin (BTC) has experienced a significant corrective decline, breaking key support levels and reaching a local low near $79,200. The Elliott Wave structure suggests that BTC has completed a Wave 4 correction, with the potential for a reversal.

However, market conditions remain fragile, with RSI indicating oversold conditions but lacking a confirmed bullish divergence. The latest downfall is considered to be a part of a long-lasting correction since BTC first reached the $108,00 area in mid-December. 

Will we see a reversal entering a new bull phase for its final push to the upside, or was this an early sign of the ending bull market?

BTC Price Analysis

The 4-hour BTC chart provides a broad perspective on the ongoing correction. The decline from its Wave X peak on Jan. 20, at $109,211, has unfolded in a complex W-X-Y-Z corrective pattern. 

This structure suggests a prolonged corrective phase, culminating in the recent capitulation move toward the 0.5 Fibonacci retracement level at $79,522.

The price action confirmed a strong bearish breakdown after BTC lost key horizontal support at $95,207, leading to an accelerated drop. The Relative Strength Index (RSI) on the 4-hour timeframe has entered deep oversold territory, currently below 30, indicating that selling pressure may be temporarily exhausted.

Additionally, BTC recently retested the 0.5 Fibonacci retracement level at $79,522, which historically aligns with terminal corrective zones. A strong reaction at this level could confirm the completion of Wave 4, setting up BTC for the next impulsive wave. 

However, failure to hold this level could open further downside toward the 0.618 Fibonacci retracement at $73,196.

From a structural perspective, BTC’s corrective sequence resembles a textbook expanded flat or double zigzag, both of which typically precede the next bullish impulse. Confirmation of a reversal requires a reclaim of at least $85,848 (0.382 Fibonacci retracement) and ultimately a break above $93,676 to re-establish a bullish bias.

BTC Price Prediction

The 1-hour BTC chart offers insights into short-term price movements, particularly in identifying potential reversal zones. Based on the current wave count, BTC may have completed its Wave Z at around the $79,000 low. 

If this marks the end of the correction, a five-wave impulse should develop in the coming sessions, confirming bullish momentum.

A preliminary relief rally could push BTC toward the 0.382 Fibonacci retracement at $85,848, serving as the first test of resistance. A sustained move above this level would set the stage for a retest of the 0.236 Fibonacci level at $93,676. 

Breaking through this zone would indicate a full trend reversal, with BTC potentially reclaiming the $100,000 psychological threshold.

However, failure to establish a higher low above $79,000 would leave BTC vulnerable to deeper losses, potentially targeting $73,196 (0.618 retracement). A confirmed drop below this level would invalidate the bullish wave count, suggesting a prolonged corrective phase.

The RSI on the 1-hour chart shows the first signs of bullish divergence, hinting at a possible local bottom. If momentum builds, BTC could begin an impulsive Wave 5 targeting new highs, aligning with Fibonacci extension levels at $102,245 and $109,211.

Key Levels to Watch

• Immediate Resistance: $85,848 (0.382 Fibonacci retracement)
• Key Resistance: $93,676 (0.236 Fibonacci retracement)
• Major Resistance: $102,245 (0.5 Fibonacci retracement)
• Immediate Support: $79,000 (recent low)
• Critical Support: $73,196 (0.618 Fibonacci retracement)
• Bullish Breakout Target: $109,211 (1.0 Fibonacci extension)
• Invalidation Zone: Below $73,196