Last week, the Bitcoin (BTC) price ended its streak of eight successive bullish candlesticks.
The decrease took the BTC price below a pivotal horizontal and Fib resistance area. Will BTC manage to reclaim it?
Bitcoin Fails to Close Above Resistance
The weekly time frame technical analysis shows that the Bitcoin price has increased rapidly since October. Bitcoin reached a new yearly high of $44,730 during the upward movement last week.
At the time, the Bitcoin price had created eight successive bullish weekly candlesticks, leading to an increase above a pivotal horizontal and Fib resistance area.
However, the BTC price fell last week, creating the first bearish weekly candlestick since the upward movement began. This took Bitcoin below its major resistance, suggesting that the breakout was a deviation.
With the RSI as a momentum indicator, traders can determine whether a market is overbought or oversold and decide whether to accumulate or sell an asset.
Bulls have an advantage if the RSI reading is above 50 and the trend is upward, but if the reading is below 50, the opposite is true. The RSI is still above 50 and in overbought territory. While it has fallen slightly, it did not cross below 70, which would be considered a bearish sign.
What Are the Analysts Saying?
Cryptocurrency traders and analysts on X are bearish on the short-term BTC trend.
IncomeSharks noted a CME gap at $40,000, which he believes will be filled.
Rager believes that the BTC price will return to test its moving average since the current rally is overextended. He tweeted:
Every uptrend for $BTC over the course of the year always resulted in a correction that re-tested multiple major moving averages Bitcoin has been in a clear uptrend since October and actually is due for a mean reversion Price breaking down here back in the $30ks range should not be alarming and would be quite healthy for further upside in Q1 2024
Finally, CredibleCrypto is bearish in the short-term because of the wave count. However, he believes that another high is likely before a large correction.
BTC Price Prediction: Has the Correction Started?
Technical analysts employ the Elliott Wave theory to identify recurring long-term price patterns and investor psychology, which helps them determine the direction of a trend.
The most likely wave count suggests that BTC began wave four in a five-wave upward movement (white) that started in September. The sub-wave count is in black, showing an extended wave three.
Since the daily RSI has generated significant bearish divergence, wave three has likely ended. A bearish divergence occurs when a momentum decrease accompanies a price increase. It often leads to downward movements.
The first target for the bottom of wave four is at the 0.382 Fib retracement support level at $37,650, 8% below the current BTC price.
Despite this bearish BTC price prediction, increasing above the yearly high will mean the correction is complete. This could trigger a 23% increase to the next long-term resistance at $50,500.
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