The Bitcoin market is undergoing a pivotal moment as momentum shifts from exuberant highs to cautious uncertainty. After reaching a record-breaking all-time high of $109,356 on January 20, BTC has since dropped over 10%, sparking intense debate among traders and analysts. Is this a temporary correction within an ongoing bull cycle—or the beginning of a prolonged bearish reversal?
This article dives deep into technical patterns, key support levels, and Elliott Wave theory to assess Bitcoin’s next likely move. Whether you're a long-term holder or an active trader, understanding these dynamics is crucial for navigating what could be one of the most consequential phases of the current market cycle.
Bitcoin’s Emerging Bearish Technical Patterns
The weekly Bitcoin price chart reveals several warning signs that suggest weakening bullish momentum. Most notably, BTC formed a double-top pattern near its all-time high—a classic bearish reversal signal. This pattern occurs when the price attempts to break higher twice but fails on the second attempt, indicating exhaustion among buyers.
Adding to the bearish case, both peaks were accompanied by long upper wicks, reflecting strong rejection at higher price levels. These candlestick shadows show that sellers stepped in aggressively after each rally, pushing prices back down. The second peak even slightly exceeded the first, creating a deviation above the $105,000 resistance zone—yet still failed to sustain gains.
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From a Fibonacci retracement perspective, the nearest support zone lies between $79,259 and $86,284, corresponding to the 0.382–0.5 retracement level of the previous upward move. If selling pressure continues, this range could become a critical battleground for bulls attempting to regain control.
Technical indicators are also flashing caution signals:
- The Relative Strength Index (RSI) shows a prolonged bearish divergence dating back to March 2024—price made new highs, but momentum did not follow.
- The MACD (Moving Average Convergence Divergence) has lost upward momentum and is nearing a bearish crossover on the weekly chart.
These signals align across timeframes. On the daily chart, Bitcoin has broken below a key ascending support trendline that had been holding since January 9. This break increases the likelihood of further downside, potentially targeting the $92,500 level in the near term.
With both RSI and MACD confirming bearish momentum—RSI falling below 50 and MACD generating a confirmed bearish cross—the technical outlook suggests that short-term weakness may persist.
Has Bitcoin’s Bull Cycle Ended?
One of the most pressing questions facing investors is whether this pullback marks the end of Bitcoin’s current bull cycle. According to Elliott Wave theory, BTC may be in Wave 5, the final phase of an upward impulse sequence.
Wave 5 recently reached a confluence of key Fibonacci extension levels:
- It matched the combined length of Waves 1 and 3.
- It hit the 1.618 external Fibonacci retracement of the prior correction.
Such confluences often mark exhaustion points in trending markets, suggesting the possibility that the primary uptrend has completed.
However, there remains room for extension. If Wave 5 continues beyond its initial target, Bitcoin could climb toward $142,020–$155,325—a scenario that would require renewed buying pressure and strong market sentiment.
Crucially, for this bullish extension to remain valid, Bitcoin must establish a higher low within the short-term support zone of $97,026–$99,443 (the 0.5–0.618 Fibonacci retracement level). A bounce from this area could confirm an A-B-C corrective structure, with Wave B forming a symmetrical triangle—a neutral consolidation pattern—before resuming upward in Wave C.
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Failure to hold this support zone, however, would invalidate the bullish count and increase the probability that the entire cycle has concluded. In such a case, a deeper correction or even a bear market could follow.
Key Levels to Watch in the Coming Weeks
As Bitcoin navigates this critical juncture, several levels will determine the path forward:
- Immediate Support: $97,026–$99,443 – A successful bounce here keeps the bull case alive.
- Stronger Support: $92,500 – Breakdown below this level increases downside risk.
- Major Support Zone: $79,259–$86,284 – Derived from Fibonacci analysis; likely destination if selling accelerates.
- Upside Target (if bullish): $142,020–$155,325 – Potential extended Wave 5 target.
Market structure suggests that volatility will remain elevated in the coming weeks. Institutional flows, macroeconomic data, and on-chain metrics will all play roles in shaping sentiment—but for now, technicals dominate.
Traders should monitor volume trends during any attempted rebound. A high-volume breakout above $105,000 could reignite bullish momentum. Conversely, low-volume rallies followed by fresh lows would confirm distribution and strengthen bearish expectations.
Frequently Asked Questions (FAQ)
Q: What is a double-top pattern in Bitcoin trading?
A: A double-top is a bearish reversal pattern where the price reaches a peak twice but fails to break higher on the second attempt. It often signals that buying pressure is fading and a downtrend may follow.
Q: Can Bitcoin still go higher after this drop?
A: Yes. If BTC finds support at $97,000–$99,443 and bounces with strong momentum, it could resume its upward trajectory toward $142,000 or more. However, failure to hold this zone increases downside risk.
Q: What does Elliott Wave theory suggest about Bitcoin’s current position?
A: It suggests BTC is in Wave 5—the final leg of a bull cycle. Reaching key Fibonacci extensions indicates potential exhaustion, but an extension is possible if support holds.
Q: How reliable are technical indicators like RSI and MACD for Bitcoin?
A: While not infallible, RSI and MACD are widely used tools that help identify overbought/oversold conditions and momentum shifts. When aligned across multiple timeframes, they provide strong context for decision-making.
Q: What should investors do during this pullback?
A: Assess risk tolerance and portfolio strategy. Long-term holders may view dips as accumulation opportunities, while traders might wait for confirmation of trend resumption before re-entering.
Q: Could Bitcoin fall below $90,000?
A: Yes—if key support levels fail and selling pressure intensifies, a drop below $90,000 is possible. The $79,259–$86,284 zone represents the next major area where buyers could step in.
Final Outlook: Divergence Between Fear and Opportunity
Bitcoin’s recent 10% decline after an all-time high has created a crossroads. On one side: growing bearish momentum, technical breakdowns, and cycle exhaustion signals. On the other: potential for one final surge before a deeper correction.
Core keywords shaping this analysis include Bitcoin price, BTC, bearish momentum, double-top pattern, Fibonacci retracement, Elliott Wave theory, technical analysis, and support levels—all essential concepts for understanding market behavior at pivotal moments.
While uncertainty dominates headlines, disciplined investors focus on structure, not sentiment. The coming weeks will test both technical foundations and market psychology.
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Whether this dip leads to recovery or collapse depends on how price reacts at critical support zones. Monitoring these levels—and understanding what they mean—will be key to making informed decisions in an evolving market landscape.