The Bitcoin price has recently shifted into a period of consolidation following a series of substantial gains, as the cryptocurrency market rides a wave of increased volatility at the beginning of the year.
At present, this leading digital currency sits just above the significant $100,000 threshold. Many market analysts speculate that further price growth could potentially be in the cards.
Analyst Flag Over ‘Excessive Bullishness’
In a comprehensive market analysis, an expert known by the name Daily Crypto Trading on social media, is leveraging the Elliott Wave Theory to forecast Bitcoin’s upcoming trends.
Their study suggests that the market may be undergoing a flat corrective wave, targeting a range around $90,000. This finding supports the stability of the recent flat ABC structure between the 89-90k bracket, marking the conclusion of wave 4.
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The analysis emphasizes that even though optimism about Bitcoin’s future is abundant, this overwhelmingly bullish sentiment might not be as positive as it seems. Daily Crypto Trading warns, "Though wave 4 is completed, this overly bullish sentiment is generally a cautionary signal." Investors are advised to tread carefully, bearing in mind that while these projections are based on probability, they do not spell certainty.
Understanding Bitcoin’s path forward also requires an acknowledgment of the broader macroeconomic environment. Daily Crypto Trading has previously highlighted how an upcoming recession could impact Bitcoin, stressing the necessity of considering macroeconomic conditions alongside technical analysis.
Implications of a $130,000 Threshold Breach for Bitcoin
Elliott Wave Theory, renowned for its past prediction accuracy, plays a pivotal role in this analysis. It suggests that markets move in foreseeable waves, with current focus resting on the final sub-wave of wave 4.
The expert believes that if Bitcoin breaks past the crucial $109,000 mark, it will trigger the start of wave 5, indicating a continuation of bullish trends. If such a robust wave 5 materializes, forecasts point to a price surge of 40-50% from current levels, leveraging Fibonacci extension levels to outline targets at $113,000, $117,000, and up to $121,000.
However, a note of caution: the wave might be truncated, leading to a double top formation followed by corrections, or it might not reach a new all-time high. Thus, exceeding the $109,000 level is considered key to the scenario of a potential blow-off top reaching $120,000.
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Contrarily, if Bitcoin dips back to approximately $90,000, this would signify a standard zigzag pattern, implying wave 4’s potential incompletion.
As a backup plan, a crucial invalidation point has been set at $130,000. Breaching this level could possibly predict an unexpected bullish breakout with a target extending toward $170,000.
The daily chart depicts BTC’s price consolidation above $100,000. Source: BTCUSDT on TradingView.com
Currently, Bitcoin is trading at $104,300, reflecting a loss of 1.4% over the past day.
Featured image courtesy of DALL-E, chart from TradingView.com.
