Recent Developments:
- Bitcoin has made a new low today and appears to have broken down from the falling wedge, moving below the wedge’s lower boundary, which may suggest invalidation of the bullish pattern.
What Does This Mean?
- As mentioned yesterday, this was the final adjustment to the triangle before a decisive move. Now that Bitcoin has slipped below the wedge, it could be seen as an invalidation of the bullish scenario.
- However, we are still within a typical reversal zone for Wave 2, according to the current Elliott Wave count. This means that, technically, Bitcoin still has a chance for a bullish recovery, provided that this zone holds.
Possible Scenarios:
- Bearish Scenario:
- With the breakdown, the chances for the bearish scenario have significantly increased. If Bitcoin fails to reclaim the wedge, we could see a further drop into the $50,000 to $52,000 range, completing a larger corrective move.
- Retest of the Wedge and Potential Fake-Out:
- There is a possibility that Bitcoin will retest the wedge from below. If the price is rejected, this would further confirm the bearish case.
- Bullish Scenario: Alternatively, it could be a fake-out, where Bitcoin regains strength and moves back into the wedge. This would suggest that the bulls still have control over the market.
Indicators:
- The RSI still shows a bullish divergence, indicating that market sentiment hasn’t fully shifted to the downside yet. This divergence is a warning sign that a potential price rebound could occur if the support zone holds.
Conclusion:
- Bitcoin is at a critical turning point. The breakdown below the wedge makes the bearish scenario more likely, especially if the price fails to reclaim the wedge. In this case, a drop into the $50,000-$52,000 range would be the next target.
- However, the bullish RSI divergence hints at a possible fake-out and reversal if Bitcoin successfully retests the wedge from below and moves back above it.
The next few hours and days will be crucial to see whether Bitcoin finds support or continues its downward trend.