The chart illustrates a complex Elliott Wave structure and a potential falling wedge pattern, which is a key focus for the current price action. Let’s break it down:
- Elliott Wave Structure:
- The chart shows a completed Wave 1 and a corrective Wave 2. Within Wave 2, we see a potential ABC corrective structure forming.
- The current price action is in a falling wedge, typically a bullish reversal pattern, which could indicate the completion of Wave C within the corrective phase.
- Falling Wedge Formation:
- The price action has tested the upper boundary of the falling wedge (marked by points D and E). The wedge is showing contraction, suggesting the end of this corrective move might be near.
- A breakout above the wedge’s upper resistance line could signal the start of a new impulsive wave, potentially Wave 3 of Wave 3, in the larger Elliott Wave count.
- Critical Support and Resistance Levels:
- The red horizontal lines indicate significant support and resistance zones. The price is currently hovering near the lower end of the support zone around $57,000.
- Failure to hold this level could result in further downside, potentially testing lower Fibonacci retracement levels or the previous Wave C lows.
- Fib Levels and Aggressiveness of Wave 2:
- The price has struggled to maintain above key Fibonacci levels, suggesting that this correction is relatively deep for a Wave 2 within the larger Wave 3.
- However, the falling wedge formation provides hope for a bullish reversal, despite the aggressive retracement.
- Outlook:
- If Bitcoin can break out from the falling wedge to the upside, it would confirm the start of a new impulsive move, possibly targeting higher levels such as the previous highs near $67,000 (projected Wave 3).
- On the other hand, a breakdown below the wedge could invalidate this bullish scenario and suggest a deeper correction, possibly towards the $52,000 level or lower.
Conclusion:
The market is at a critical juncture. A bullish breakout from the falling wedge would align with the larger Elliott Wave count, indicating a continuation of the uptrend. However, the current inability to hold key Fib levels adds caution, particularly as Wave 2 seems quite aggressive. Monitoring the next few sessions will be crucial, especially for your ETH and SOL positions, which may correlate with Bitcoin’s next move.