DailySun
Bitcoin is at a pivotal point, facing a significant area of technical resistance. While recent trends have favored buyers, the convergence of various high time frame indicators suggests that we may be on the brink of a more pronounced corrective phase.
At present, Bitcoin (BTC) is trading in a prominent resistance zone where several high time frame technical benchmarks intersect. Essential elements include the prior point of control, the low of the value area from a previous range, and crucially, the 0.618 Fibonacci retracement level, which aligns with the potential end of a C-leg in an ABCD correction pattern.
This situation becomes increasingly critical as the price structure formulates a traditional ABC retracement in the opposite direction of the prevailing uptrend, hinting at a deeper decline if the resistance holds firm.
Key points
- Bitcoin is currently testing the 0.618 Fibonacci extension, coinciding with significant high timeframe levels.
- The price structure appears to reflect an ABCD corrective pattern, with the C-leg nearing completion at current price points.
- Short squeeze dynamics have propelled the rally, which lacks substantial organic support—heightening the chances of rejection.
The ABCD corrective pattern, a well-established concept in Elliott Wave Theory, is clearly evident in Bitcoin’s chart. This formation consists of three waves: the A-wave retracts from recent peaks, the B-wave continues in the trend’s direction, and the C-wave retracts once more before the D-leg potentially initiates a deeper movement.
Currently, Bitcoin appears to be completing its C-leg, with the $94,000–$95,000 range acting as significant technical resistance. This area is reinforced by the 0.618 Fibonacci retracement from the all-time high and key high time frame daily support and resistance levels.
The recent surge in price is viewed as primarily driven by short covering, rather than by strong spot purchases. This lack of organic buying raises concerns for bullish traders, especially as the price approaches a tightly clustered resistance area.
Volume remains unpredictable, and the market’s reaction at this point will likely determine Bitcoin’s next major directional move. A rejection at the current C-leg zone could trigger the D-leg pullback and complete the correction.
Momentum-based traders and those focused on price structure are watching the $60,000–$67,000 area closely, as it aligns with the anticipated D-leg of the ABCD pattern. This region also represents a high-probability area for establishing a macro higher low, consistent with the dominant trend and potentially setting the stage for the next significant upward wave.
What to expect in the coming price action
If the existing resistance persists and a rejection occurs, Bitcoin is expected to decline towards the $60K–$67K range. This movement would finalize the ABCD correction and create a crucial higher low within the overarching trend.
On the other hand, if Bitcoin successfully reclaims the $94,000–$95,000 resistance zone with strong volume and follow-through, it could overturn the bearish outlook and open the path for a rally towards new all-time highs.
For now, it is wise to exercise caution as Bitcoin approaches a significant technical ceiling.
