- SUMMARY
In the cryptocurrency market, Bitcoin has experienced a bullish trend, reaching new highs.
However, there are indications that a potential correction may be on the horizon.
Analysts are observing the possibility of a “wave four” correction, which could lead to a significant price decline of around 16-30%.
This correction would align with historical patterns in bullish markets.
The support area for this downward correction is estimated to be between $50,900 and $62,000.
Following this correction, the expectation is for Bitcoin to continue climbing higher with additional “wave five” and “wave four” rallies.
Currently, Bitcoin is in a “third of a third wave” rally, which is typically the most bullish phase.
However, analysts caution that the upcoming fifth waves may bring volatility and potential downside.
Fifth waves often exhibit “ending diagonal” structures, which can be indicative of choppiness and sharp sell-offs.
Despite the potential for corrections, the overall outlook for Bitcoin remains bullish.
Traders are advised to avoid shorting positions until clear market signals indicate a top.
Initial indications of a top formation could include a break below the Tuesday low of $68,518 or a break below a higher support level.
Ultimately, traders should monitor support levels and price action closely to navigate the potential volatility in the coming weeks.
- Key Takeaways
Potential Correction on the Horizon
A wave four correction could cause a significant price decline of around 16-30%, with support at $50,900 to $62,000.
Monitoring Volatility
Bitcoin is currently in the bullish third of a third wave rally, but volatility and potential downside may accompany the upcoming fifth waves and ending diagonal structures.
Keep Positions Adjusted
Traders should avoid shorting positions until market signals indicate a top, but should monitor support levels and price action for potential volatility.