Bitcoin is facing a critical juncture, trading near a significant level of resistance that could signal the start of a correction. While recent momentum has favored bulls, confluence with several high-frequency technical indicators suggests this may be setting the stage for a deeper retracement phase. 🧐
At its core, Bitcoin’s price action is converging at multiple key levels:
* It sits near a historical resistance zone marked by prior support points and notable Fibonacci level (0.618) – this aligns with the potential completion of a C-leg within an ABCD correction pattern.
* The current price structure also resembles a classic ABC retracement against the prevailing uptrend, suggesting a potential deeper correction if resistance holds.
This setup is further bolstered by the price action forming a classic ABC retracement against the prevailing trend.
**Key Takeaways:**
1. Bitcoin’s rally has likely been driven by short covering rather than organic buying, raising concerns about sustainable upward momentum.
2. The 0.618 Fibonacci level and other high-time frame support/resistance levels are acting as resistance points.
3. While the market is showing a lot of volatility, the price action suggests that this could be the beginning of a deeper correction if resistance remains strong.
**What to Watch For:**
* Will Bitcoin break through the current resistance? If not, we might see a deeper pullback towards $60K-$67K region.
* Can Bitcoin reclaim the $94,000 – $95,000 price zone with strong volume and follow-through to potentially invalidate this bearish setup?
Ultimately, cautious observation is needed as the market awaits further price action.