### Bitcoin Technical Analysis: Anticipating a Correction from 
98K to 
88K
#### **Current Market Context**
Bitcoin has shown a remarkable rally, reaching $98,000, driven by strong momentum, increased institutional participation, and retail euphoria. However, technical indicators suggest a potential correction to $88,000 before the next leg upward. Here's why:
---
#### **1. Overbought Conditions**
- **RSI (Relative Strength Index):** On the daily chart, Bitcoin's RSI has surged above 85, indicating extreme overbought conditions. Historically, such levels have preceded short-term corrections as the market cools down.
- **Stochastic Oscillator:** The stochastic also shows a bearish divergence, where price makes higher highs, but the indicator forms lower highs.
---
#### **2. Key Resistance at98K**
- **Fibonacci Extension Levels:** Using the previous swing low at $75K and the recent high at98K, the 2.618 Fibonacci extension aligns with the current resistance zone, signaling a potential reversal area.
- **Psychological Level:** $100K is a major psychological barrier. Traders often front-run such levels, leading to selling pressure just below it.
---
#### **3. Volume Profile**
- **Decreasing Volume:** The rally to98K has been on declining volume, indicating weakening buying interest. A healthy uptrend typically requires increasing volume to sustain higher prices.
- **Volume Gap Below $90K:** There is a visible volume gap in the range of88K–$90K, which could act as a magnet for price as it seeks strong support.
---
#### **4. Moving Averages and Support Levels**
- **Exponential Moving Averages (EMA):** The 21-day EMA is currently at
87K, aligning with the projected correction target. A reversion to this EMA is consistent with Bitcoin's behavior in prior bull markets.
- **Support Zone:** The88K region coincides with a strong support level from prior consolidation, making it a logical area for a pullback.
---
#### **5. Elliott Wave Analysis**
- **Wave 4 Correction:** If we are in an Elliott Wave impulse structure, the current move to98K could mark the end of Wave 3. A Wave 4 corrective phase to 88K is plausible before the continuation into Wave 5, targeting new highs above $100K.
---
#### **6. Bearish Candlestick Patterns**
- On shorter time frames (4-hour and daily), Bitcoin has formed a bearish divergence and a potential "shooting star" or "doji" near98K, both indicative of a reversal.
---
#### **Conclusion**
A correction to88K would provide a healthy reset for Bitcoin's bull run, allowing new buyers to enter and setting the stage for a sustainable breakout above $100K. Traders should monitor key levels and indicators like RSI, volume, and moving averages for confirmation of the correction.
**Key Levels to Watch:**
- Resistance:98K, $100K
- Support:88K, $85K
**Strategy:** Consider taking partial profits at current levels and re-entering near88K with stop-losses placed slightly below $85K.
98K to 88K#### **Current Market Context**
Bitcoin has shown a remarkable rally, reaching $98,000, driven by strong momentum, increased institutional participation, and retail euphoria. However, technical indicators suggest a potential correction to $88,000 before the next leg upward. Here's why:
---
#### **1. Overbought Conditions**
- **RSI (Relative Strength Index):** On the daily chart, Bitcoin's RSI has surged above 85, indicating extreme overbought conditions. Historically, such levels have preceded short-term corrections as the market cools down.
- **Stochastic Oscillator:** The stochastic also shows a bearish divergence, where price makes higher highs, but the indicator forms lower highs.
---
#### **2. Key Resistance at
98K**- **Fibonacci Extension Levels:** Using the previous swing low at $75K and the recent high at
98K, the 2.618 Fibonacci extension aligns with the current resistance zone, signaling a potential reversal area.- **Psychological Level:** $100K is a major psychological barrier. Traders often front-run such levels, leading to selling pressure just below it.
---
#### **3. Volume Profile**
- **Decreasing Volume:** The rally to
98K has been on declining volume, indicating weakening buying interest. A healthy uptrend typically requires increasing volume to sustain higher prices.- **Volume Gap Below $90K:** There is a visible volume gap in the range of
88K–$90K, which could act as a magnet for price as it seeks strong support.---
#### **4. Moving Averages and Support Levels**
- **Exponential Moving Averages (EMA):** The 21-day EMA is currently at
87K, aligning with the projected correction target. A reversion to this EMA is consistent with Bitcoin's behavior in prior bull markets.- **Support Zone:** The
88K region coincides with a strong support level from prior consolidation, making it a logical area for a pullback.---
#### **5. Elliott Wave Analysis**
- **Wave 4 Correction:** If we are in an Elliott Wave impulse structure, the current move to
98K could mark the end of Wave 3. A Wave 4 corrective phase to 88K is plausible before the continuation into Wave 5, targeting new highs above $100K.---
#### **6. Bearish Candlestick Patterns**
- On shorter time frames (4-hour and daily), Bitcoin has formed a bearish divergence and a potential "shooting star" or "doji" near
98K, both indicative of a reversal.---
#### **Conclusion**
A correction to
88K would provide a healthy reset for Bitcoin's bull run, allowing new buyers to enter and setting the stage for a sustainable breakout above $100K. Traders should monitor key levels and indicators like RSI, volume, and moving averages for confirmation of the correction.**Key Levels to Watch:**
- Resistance:
98K, $100K- Support:
88K, $85K**Strategy:** Consider taking partial profits at current levels and re-entering near
88K with stop-losses placed slightly below $85K.
algorithmic trader - I have quantified sentiment necessary for trading elliott waves
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
algorithmic trader - I have quantified sentiment necessary for trading elliott waves
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.