Key Takeaways
- Wave 4 correction confirmed as BTC breaches critical support levels.
- Fibonacci 0.382 level ($85,848) emerges as next potential downside target.
- RSI oversold signals may hint at short-term relief after steep decline.
- Strategy (formerly MicroStrategy) acquires $2B in BTC, bolstering institutional confidence.
Market Overview: Bitcoin’s Sharp Decline
Bitcoin (BTC) has entered a Wave 4 correction within its Elliott Wave cycle, marked by a breakdown below key support at $90,000. The drop reflects broader market uncertainty, with BTC now testing Fibonacci retracement levels for potential stabilization.
Technical Analysis
Daily Chart Insights:
- Critical support: $92,000 (horizontal) and 0.236 Fib level breached.
- Next focus: 0.382 Fib level at **$85,848**, followed by 0.5 ($79,522) and 0.618 ($73,196).
- RSI: Oversold conditions suggest possible near-term rebound.
Elliott Wave Structure:
- Wave 3 peak: $108,000 (previous high).
- Current phase: ABC corrective pattern, with Wave C driving downward momentum.
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Institutional Moves: Strategy’s $2B Bitcoin Purchase
Strategy (ex-MicroStrategy) continues its aggressive BTC accumulation, adding 20,356 BTC ($1.99B)** at an average price of **$97,514 per coin. Key highlights:
- Total reserves: ~500,000 BTC ($33.1B total cost).
- Unrealized profit: $14.8B despite Q4 2024 net loss.
- Institutional backing: BlackRock (5% stake) and 12 U.S. state pension funds hold shares.
BTC Price Prediction: Short-Term Scenarios
Bullish Case:
- Rebound trigger: Holding $85,848 (0.382 Fib).
- Targets: $90,000–$93,676 (relief rally), then $95,207 (resistance).
- Wave 5 potential: New all-time highs upon reversal confirmation.
Bearish Continuation:
- **Break below $85,848**: Targets $79,522 (0.5 Fib).
- Extended downside risk: $73,196 (0.618 Fib).
1-Hour Chart Observations:
- Oversold RSI hints at short-term bounce.
- WXYXZ corrective pattern nearing completion.
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Key Levels to Monitor
| Resistance | Support |
|-----------------------|---------------------|
| $93,676** (0.236 Fib) | **$85,848 (0.382 Fib) |
| $95,207** (prior support) | **$79,522 (0.5 Fib) |
| $102,245** (psychological) | **$73,196 (0.618 Fib) |
FAQ: Bitcoin’s Wave 4 Correction
Q: How long might Bitcoin’s correction last?
A: Typically weeks to months, depending on market structure. Watch for stabilization at Fib levels.
Q: What institutional trends support BTC?
A: Entities like Strategy and BlackRock signal long-term confidence via large-scale accumulation.
Q: Is now a good time to buy BTC?
A: Oversold RSI suggests potential entry near $85,848, but await confirmation of reversal.
Q: Could BTC drop below $70,000?
A: Unlikely unless macro conditions worsen. The 0.618 Fib ($73,196) is a strong historical support.
Conclusion
Bitcoin’s Wave 4 correction presents both risks and opportunities. Institutional buys underscore long-term bullish sentiment, while technicals advise caution until key levels are reclaimed. Traders should monitor $85,848 support and RSI divergences for next-phase signals.
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