WXY Corrective Pattern Overview:
Similar to our analysis on Solana, Bitcoin also appears to be following a WXY corrective structure. Within this pattern, the current market is completing a three-wave Y structure. We have already seen the completion of Wave A, and we are now navigating through Wave B, which is expected to complete with a Wave C.
Wave C of B Breakdown:
Within Wave B, we are tracking a typical five-wave move inside Wave C, which should finalize the corrective structure before another leg downward (the final leg of Wave Y) begins.
- Wave 4 of Wave 3 is currently unfolding. This phase is characterized by a short pullback to support before the final leg of Wave 5 pushes upward to complete Wave C.
- Wave 4 has reached the Fibonacci support zone as indicated on the chart, specifically at the 0.236 level near $62,467. However, we expect a slightly deeper move into the 0.382 to 0.5 Fibonacci retracement levels, near $61,522 – $60,755, before completing this pullback.
Expectations for Wave 5 of Wave C of B:
- After Wave 4 concludes, we expect a final upward move in Wave 5 to complete Wave C of B. This upward push will likely retest the previous highs or encounter resistance at higher Fibonacci extensions.
- Our primary resistance target for Wave 5 is situated between $64,500 and $67,000, coinciding with the upper trendline from earlier resistance.
Larger Structure:
Once Wave C of B completes, we anticipate the larger corrective Wave Y to resume, which will likely result in a deeper downward correction for Bitcoin. This next leg down could target support zones around $57,000 or lower, consistent with the continuation of the WXY pattern.
Key Technical Indicators:
- RSI Analysis: The Relative Strength Index shows a mild bearish divergence, suggesting that momentum is waning during this current Wave C of B. This supports our hypothesis of a potential dip before a final rally in Wave 5.
- Fibonacci Levels: As noted, the Fibonacci levels between 0.382 and 0.5 provide crucial support zones that need to hold if Bitcoin is to continue higher before the final corrective leg.
Short-Term Market Sentiment:
In the short term, Bitcoin remains in an overall corrective phase. The current upward movement within Wave C has generated optimism, but this is likely to be a temporary rally within the broader corrective WXY structure.
Strategic Positioning:
We remain cautious in this market as we approach the Wave 5 target zone. While short-term upward momentum may continue, we are prepared for a sharper downside move once Wave B concludes and the final Wave Y unfolds. Any long positions taken during this Wave 5 rally should be monitored closely as resistance levels approach.
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