Bitcoin Drops: Elliott Wave Analysis Signals Correction Before Upturn Resumes

Elliott Wave Analysis indicates a possible downside move in the Bitcoin market. The current correction in Wave IV is expected to continue with a triangle pattern, and Wave E is yet to decline. Despite this short-term correction, the overall trend remains bullish, and a surge in Wave V is anticipated after the completion of Wave IV.

Bitcoin (BTC) Price Analysis: Elliott Wave Suggests Further Correction Before Resuming Uptrend

Technical Analysis:

Based on Elliott Wave analysis, Bitcoin (BTC) is currently undergoing a corrective phase within a larger uptrend. The ongoing correction is identified as wave ((D)) within the broader Wave IV retracement.

Within wave ((D)), the price of BTC has completed four out of five sub-waves. The current expectation is that price action will complete wave ((D)) with a final decline in wave E. Once wave ((D)) is complete, the market should resume its upward trajectory in wave (III).

Trading Strategy:

Given the likelihood of an impending decline in wave E, traders are advised to exercise caution and potentially initiate short positions. Target levels for the decline extend down to the 31046.25 support level, which represents the invalidation point for the wave ((D)) correction.

Technical Indicators:

Supporting the bearish scenario, the price of BTC currently trades below its 200-period moving average (MA200), indicating a short-term downtrend. Additionally, the Wave Oscillator, a momentum indicator, is also bearish, suggesting a potential shift in momentum to the downside.

Overall Outlook:

While Bitcoin remains in an overall uptrend, the current corrective phase necessitates caution among traders. The completion of wave ((D)) and the subsequent decline in wave E will provide a more favorable entry point for buyers to rejoin the uptrend.

Disclaimer:

Trading based on technical analysis involves inherent risks and traders should always conduct their own research and due diligence before making any trading decisions. The analysis presented here is solely for informational purposes and should not be construed as investment advice.