Summary:
Bitcoin is consolidating in a corrective pattern before advancing to $100,000.
The recent drop appears to be the c-wave down of the abcde Elliott Wave pattern.
Bearish market sentiment may indicate a bottom for a recovery rally.
Since March, when Bitcoin (BTC-USD) reached an all-time high near $74,000, BullBear Trading has maintained that it would consolidate in a sideways corrective pattern before advancing to $100,000 and beyond. Despite recent short-term weakness, BullBear Trading believes this outlook remains valid and that dips are buying opportunities.
Recent Price Movements:
According to BullBear Trading, the recent drop seems to be the c-wave down of the abcde Elliott Wave sideways triangle pattern. The recent low only exceeded the May 1st low by 5%, a minor movement in Bitcoin terms. Price appears to be recovering now. Although d and e waves may follow in the sideways pattern before the next big rally, this is likely the best entry point we will see. A move above $60,000 should confirm this analysis.
Market Sentiment:
BullBear Trading points out that the Bitcoin Fear/Greed Index shows bearish market sentiment at similar levels to the end of the last sideways correction, which led to the last big rally. This sentiment should be fearful enough to establish a bottom here and allow for a recovery rally back near the highs of the range.
Technical Indicators:
Daily Chart: In September, when sentiment was similarly bearish, the price corrected to the convergence of the 50-day and 200-day EMAs (blue and red, respectively) before taking off. We are in a similar position now. In August/September, the daily RSI level corrected back into its green support zone and formed a bull divergence, as it is doing now. On the bearish side, there is a trendline break and a drop back into the green trend channel after breaking out to the upside. These are consistent with a bullish sideways corrective period.
Weekly Chart: The weekly RSI corrected to the same level as in September, indicating a solid technical reset without much price damage. The wave count is now at 4 of 3. The next bullish impulse wave will be 5 of 3, typically the strongest moves in Bitcoin bull markets.
Monthly Chart: Within bull moves, the 10-month SMA in blue has been key, and that level is being tested now.
Conclusion:
BullBear Trading concludes that if the price dips back into the $55,000-$53,000 zone, this analysis will need to be re-evaluated. However, a move above $60,000 would increase confidence that the long-term bull trend is resuming. An additional period of volatility and churn within the range, lasting about 2-6 weeks, may be needed to complete this corrective pattern.
Disclaimer: The information provided in this article is intended for informational purposes only. Cryptocurrency trading involves significant risks, and it is advised to conduct thorough research before making any financial decisions.
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