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Bitcoin’s recent price action has shown signs of fading momentum three weeks after reaching a new all-time high of $111,814. The leading cryptocurrency climbed back above $110,000 on Monday off the back of cooling U.S. inflation data and a temporarily weaker dollar.
However, the rally was short-lived. Profit-taking, compounded by geopolitical tensions between Israel and Iran, has contributed to a risk-off environment that pushed Bitcoin down below $105,000 in the past 24 hours. This sharp reversal highlights a significant technical level that could decide whether Bitcoin sustains its uptrend or enters a crash towards $94,000.
Final Fibonacci Resistance Holding The Line
According to a new analysis shared by pseudonymous crypto analyst XForceGlobal on the social media platform X, Bitcoin’s current corrective structure could deepen if it fails to overcome the 88.6% Fibonacci resistance level. The analyst highlighted that the bullish impulse that carried Bitcoin now appears to be losing steam.
The price zone around $110,500, which is marked by the 88.6% Fibonacci resistance, has not been convincingly breached, casting doubt on the strength of the current wave structure. Bitcoin tested this level twice earlier this week, and, as noted by the analyst, if this resistance level fails to break soon, there is a slight possibility of a deeper pullback.
If this pullback does occur, this would lead to the formation of a corrective wave C, and with distinct symmetry in an ABC corrective pattern. In this case of the corrective Wave C playing out, the next central area of interest lies around the $94,000 level, an area that aligns with the completion of a larger impulse Wave 2.
Wave 2 Dip To $96,000 Before Bullish Wave 3 Begins
The rundown of a corrective Wave 2 and a bearish impulse Wave 2 is based on the outlook of Bitcoin failing to clear the 88.6% Fibonacci resistance at $110,000. Applying the Elliott wave count on the current price action shows that the recent push to $111,814 all-time high was a larger bullish impulse Wave 1. However, the ensuing correction since then has also played out in the form of a sub-wave 123 structure, and an ABC corrective pattern. Altogether, these are expected to make up a larger corrective impulse Wave 2.
Nevertheless, XForceGlobal noted that Bitcoin is still in a highly bullish structure on the macro level. If the price action plays out this way, the next move after the impulse Wave 2 to $94,000 would be a reversal upwards with bullish impulse Wave 3. In this case, the analyst projected an expansion move that would send Bitcoin to another all-time high. Notably, the price target in this case would be a surge above $118,500. At the time of writing, Bitcoin is trading at $105,000, down by 2.5% in the past 24 hours.
Featured image from Getty Images, chart from Tradingview.com
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