Bitcoin Price Analysis: Current Trends, Support Levels, and Key Scenarios

Welcome to this detailed Bitcoin update. In this article, we will focus on the short-term price movements of Bitcoin, ongoing market trends, and potential scenarios as the cryptocurrency remains in a critical support zone.

Current Market Situation

Bitcoin's downtrend continues to dominate the charts. Despite being in a support area where the price could attempt to form a low, none of the key resistance levels to the upside have been breached. This keeps the bearish sentiment intact as we anticipate the next moves during the New York trading session.

The ongoing price decline highlights the prevailing selling pressure, and while we witnessed some sharp declines recently, they are a continuation of an established downward trend rather than new developments.

Key Observations:

1. Wave Count Analysis:
   The Elliott Wave structure suggests that the recent lows align with a more bearish interpretation. While we initially labeled the movement as an ABC corrective structure, the price action increasingly resembles a five-wave impulsive move to the downside.

2. Support and Resistance Levels:

   • The critical support lies at $93,650. A sustained break below this level would significantly diminish the chances of a bullish reversal in the short term.
   • The invalidation level for the current Elliott Wave count is at $91,400. A breach of this red line would confirm the bearish scenario.
   • On the upside, a break above $97,300—the recent swing high—would signal a potential reversal.

3. Correlation with Other Markets:
   Despite suggestions of a correlation with the S&P 500, Bitcoin's price action remains independent. While the S&P 500 recovered overnight, Bitcoin failed to follow suit, underscoring its divergence.

Short-Term Scenarios

Bearish Case:

The ongoing downward momentum could extend to the $85,000 range, aligning with the Wave C projection in the larger Wave 4 correction. The lack of any meaningful bounce or reaction at current support levels strengthens this scenario.

Bullish Case:

For a bullish reversal, we need:

• An impulsive reaction to the upside in the support zone.
• A break above $97,300, signaling that a local low has been established.
• Sustained trading above the current trend line to confirm upward momentum.

Neutral Outlook:

The possibility of a triangle formation remains, though it is considered less likely. Triangles are often complex structures and would require additional evidence before being incorporated into the primary analysis.

Technical Insights

Elliott Wave Perspective

• The larger Wave 4 correction could already have bottomed on December 30, but the lack of impulsive upward movement leaves this uncertain.
• The five-wave downward move makes the bearish scenario (white count) more probable.

Support and Reaction

Key support at $93,650 has not been decisively broken yet. However, if Bitcoin produces a wick below this level followed by a rapid recovery, it would indicate strong buying interest at the 78.6% retracement level, potentially invalidating the bearish scenario.

Trading Strategy

For traders, the current environment is not ideal for aggressive long positions. A "catching the falling knife" approach is risky without clear confirmation of a reversal. Instead, look for:

• A break above the trend line for an early signal.
• Confirmation through impulsive upward movement in support areas.

Conclusion

Bitcoin's short-term trend remains bearish as the price hovers near critical support levels. While a recovery could surprise the market, the lack of reaction at support and the strong downward momentum make a continuation of the decline more likely.

Keep an eye on key levels such as $93,650, $97,300, and $91,400 for guidance on the next move. Always exercise caution and patience, waiting for clear signals before making trading decisions.

Thank you for reading!