Bitcoin’s Price Could Test Key Fibonacci Levels, Wave 2 in Motion?

Bitcoin may be in a prolonged Wave 2 correction, potentially lasting 4-6 months and testing key Fibonacci levels for support.

A deeper correction could push BTC below August 2024 lows, with critical supports at $75,805, $65,405, and possibly $51,121.

The bullish trend remains intact, but a breakdown from the trend channel may confirm a bearish scenario before a potential recovery.

According to analyst Decode, the latest Elliott Wave analysis presents a bearish alternate scenario. Sentiment suggests that Bitcoin is in a Wave 2 correction, invalidating a prior Wave 4 count. This shift in perspective raises critical questions about the degree of this correction and its implications for future price movements. If January marked the peak, Bitcoin might be in a larger-degree Wave 2, potentially lasting another 4-6 months. This scenario could push prices below the August 2024 lows.

Source: Decode

Key Technical Indicators and Fibonacci Levels

Bitcoin’s price movements align with Elliott Wave theory, Fibonacci retracement levels, and established trend channels. The recent peak completed Wave 1, signaling an impulsive move. Now, the market undergoes a corrective structure forming Wave 2. The price is currently hovering near the 0.236 Fibonacci retracement level at $87,951.

The strengthening correction involves levels of support and resistance. Crucial response points may be the 0.5 retracement level of $65,405, and the 0.382 Fibonacci level of $75,805. Bitcoin may drop to $51,121, the 0.618 Fibonacci level, if it continues to decline. Prices may reach the $35,562 0.786 level in the event of a larger correction.

Market Structure and Trend Analysis

Bitcoin’s price follows an ascending channel, confirming prior bullish momentum. However, the corrective phase challenges this trend. Several trendlines highlight the broader bullish structure, with price currently testing key support zones. A breakdown below the existing trend channel could validate a deeper correction.

Moreover, resistance levels remain crucial for determining future price action. Prior highs indicate significant reaction zones where Bitcoin could face selling pressure. The ongoing decline adheres to structured Elliott Wave counts, showing smaller sub-waves within the corrective phase.

If the bearish scenario plays out, Bitcoin can anticipate extended consolidation before resuming an uptrend. Sentiment remains divided, however, with Decode predicting a potential reversal at key Fibonacci levels.

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