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Bitcoin’s price surge has encountered challenges over the last 48 hours, allowing bearish sentiments to resurface. Following a recent peak of $124,128 just three days prior, the foremost cryptocurrency has since retraced by approximately 4.8%, settling back into the $117,000 to $118,000 range at the time of this writing. This decline raises the potential that the widely awaited macro peak may have already occurred, and further declines may ensue if bullish energy remains absent.
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Analyst Outlines Bearish Bitcoin Wave Structure
Bitcoin appeared to be gaining traction in early August after bouncing off a dip around $112,000. However, following its recent peak at $124,128, sellers promptly intervened, driving the price down. This downturn has been marked by dwindling short-term momentum. While it may be premature to draw conclusions, relative strength index (RSI) readings are beginning to indicate a bearish divergence on the 4-hour candlestick timeframe chart.
On the social media platform X, crypto analyst CasiTrades discussed what they perceive as the onset of a larger ABC corrective structure for Bitcoin. Based on this projection, Bitcoin might be entering Wave A, which includes a five-wave corrective pattern that could drive the price down to around $77,000 at the macro 0.382 Fibonacci retracement.
The strategy for this price decline anticipates an initial Wave 1 drop to $112,000, a brief Wave 2 rebound back to $120,000, followed by another Wave 3 decline into the $89,000 range. Subsequently, the next move is a Wave 4 retest break of $100,000 before shifting into Wave 5, which culminates in the ultimate Wave A bottom at $77,000.
Chart Image From X: CasiTrades
The accompanying chart shared by the analyst illustrates the wave counts with subwave accuracy. Notably, the analyst also highlighted that the ultimate macro target for the conclusion of this correction is positioned at $60,000, aligning with the golden 0.618 Fibonacci retracement. This is at the macro level and can only be realized if the ABC corrective waves unfold to completion.
A Bearish Perspective Amidst Optimistic Predictions
This assessment offers a sobering contrast at a moment when numerous forecasts continue to depict Bitcoin as poised for $150,000 and beyond. Despite robust institutional inflows and technical milestones like the realized price moving above the 200-day moving average being bullish indicators, the bearish scenario postulated by CasiTrades could still hold validity.
Should Bitcoin fail to recapture bullish momentum, the ongoing correction might evolve into something more profound, rendering the $124,000 peak not merely a pause but the macro top of this cycle.
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Even though numerous cryptocurrencies have closely mirrored Bitcoin’s movements throughout this cycle, CasiTrade’s analysis doesn’t imply a bearish outlook for the entire crypto market. The analyst suggests that if this bearish scenario unfolds, it could trigger the long-awaited capital rotation from Bitcoin and into large-cap altcoins, some of which may soar to new all-time highs even as Bitcoin retraces. As of this writing, Bitcoin was trading at $118,203.
Featured image from Unsplash, chart from TradingView
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