Bitcoin (BTC) Shows Signs of Concluding Its Corrective Wave within a Descending Channel

Bitcoin (BTC) is showing signs of concluding its corrective wave within a descending channel. The higher time frame suggests the completion of wave (4).

Bitcoin (BTC) is showing signs of concluding its corrective wave and potentially starting a new five-wave structure in a higher time frame. The lower time frame, however, reveals a developing breakout attempt, which could either confirm a bullish reversal or lead to another leg lower before the next impulsive wave begins.

BTC is correcting in a descending channel after reaching a cycle high of $108,000, which completed wave (3). The price has bounced from the 0.5 Fibonacci retracement at $80,292, potentially indicating the end of wave (4).

Chart: BTC/USD

Typically, wave (4) corrections hold between 0.382 and 0.5 Fibonacci retracement levels. In this case, the 0.382 Fib level is at $86,774, and the 0.5 Fib level is at $80,292. A break above 0.382 Fib could confirm the start of wave (5).

The Relative Strength Index (RSI) is still in neutral territory, showing that neither strong bullish nor bearish momentum has formed yet.

If BTC manages to close an hour candle above $86,774, it could confirm a shift in momentum, setting the stage for a final rally toward higher levels. The next resistance area is at the 0.236 Fib level of $94,795, which could be a stepping stone toward the all-time high zone of $107,760.

However, if BTC fails to hold above $80,292, it could continue to fall to the 0.618 Fib level at $73,809 before the next bullish leg begins.

On the other hand, if BTC falls below $64,580, it would invalidate the bullish scenario. This level aligns with the 0.786 Fib retracement from the entire uptrend.

BTC is attempting to breakout from the descending channel in the 1-hour chart. If successful, it could form wave (i) of a new impulsive structure.

Chart: BTC/USD

However, BTC is currently testing resistance at the lower trendline of the channel, and a rejection could lead to another retracement (wave (ii)) before wave (iii) accelerates toward higher levels.

For the bullish scenario to hold, BTC must break and close an hour candle above the 0.382 Fib level at $86,774, confirming a shift in momentum.

If wave (iii) extends, it could push toward the 0.236 Fib level at $94,795, with the next major target being the 0.1 Fib level at around $100,000.

But if BTC fails to maintain its breakout attempt, it could continue to fall to the 0.5 Fib level at $80,292, which is also the neckline of a potential head-and-shoulders pattern.

A sustained move below $80,292 would open the door for a deeper retracement to the 0.618 Fib level at $73,809, where another significant support level awaits.

On the other hand, a confirmed move above $94,795 would significantly strengthen the bullish outlook, setting the stage for a final wave (v) push toward the all-time high.

If BTC manages to maintain its higher low structure and close an hour candle above $86,774, it could confirm the start of wave (5), positioning it for a new price discovery phase.