Let's see if the bulls will be able to regain their strength.
Bitcoin failed to close above resistance
on the weekly timeframe, Bitcoin has been experiencing a rapid increase in price since October. As BTC continued to climb, it reached a new yearly high of $44,730, surpassing both a horizontal resistance level and a key Fibonacci level. During this time, Bitcoin formed eight consecutive bullish weekly candles.
However, last week, the price experienced a decline, marking the first bearish weekly candle on the chart since the start of the upward movement. This drop pushed Bitcoin below the key resistance level, indicating that the previous bullish breakout was merely a rejection.
Source: TradingView
The relative strength index (RSI) is currently still above the neutral level of 50 but has entered overbought territory. Although it has slightly decreased, it has not yet fallen below 70, which would be considered a bearish sign.
According to analysts
Traders and analysts on Platform X are currently bearish on the short-term trend of BTC.
IncomeSharks pointed out a gap on the CME around $40,000, speculating that Bitcoin will fill this gap in the near future.
BTC/USD daily chart. Source: X
Rager believes that the price will return to test its moving average, as the current rally has gone too far. In his own words:
“Every $BTC uptrend throughout the year always resulted in a correction that retested several major moving averages. Bitcoin has been in a clear uptrend since October and should actually revert to its mean.. Price breakout below $40 thousand. should not cause alarm, this will be a quite healthy correction for further growth in the 1st quarter of 2024.”
Lastly, CredibleCrypto has a bearish short-term outlook based on wave analysis. However, he believes that there is potential for another high before a major correction occurs.
BTC forecast: has a correction begun?
Elliott wave analysis suggests that BTC has entered the fourth wave within a five-wave upward movement (white color). It is worth noting that the third wave was extended, with its subwaves highlighted in black on the chart.
Since the daily RSI has exhibited a significant bearish divergence, it is likely that the third wave has concluded. Bearish divergence occurs when the price rises while momentum declines, often leading to downward movements.
The initial target for the bottom of the fourth wave sits at the 0.382 Fibonacci retracement support level, located at $37,650, which is approximately 8% below the current price.
Source: TradingView
On the other hand, if BTC surpasses the yearly high, it would indicate that the correction is complete. This could potentially lead to a 23% increase towards the next long-term resistance level at $50,500.
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