Bitcoin High Time-frame Analysis

Bitcoin’s price action on the weekly timeframe has seen significant structural damage following last week’s historic drop. From a bullish perspective, this sell-off has raised concerns about a potential wave 5 completion, making it highly probable that a larger correction could be underway. Price was previously trading outside the channel top resistance, but the sharp reversal back inside has confirmed a bearish deviation, aligning with Elliott Wave theory and signaling potential downside continuation.

Points to Consider

Wave Structure & Bearish Confirmation: Bitcoin’s bullish expansion started at the channel low, with wave 1 topping around $31,000, a wave 2 correction to $24,000, and a wave 3 rally to $73,000. The wave 4 correction held above wave 3, leading to a final wave 5 impulse. The rejection at the channel top and the sharp breakdown confirm a bearish deviation, increasing the probability of a deeper retracement.
Potential for a Larger Correction: If this wave structure holds true, Bitcoin could enter a bearish wave count, targeting lower levels near the channel low. A similar structure was observed in 2021, where an initial impulse down marked wave 1, followed by a wave 2 rally, before a deeper wave 3 correction took Bitcoin to the $15,000–$16,000 region over the course of a year.
Exposed Single Prints & Price Action Dynamics: Current price action has no real support in the exposed single-print area, meaning Bitcoin could continue to trade within this zone on lower timeframes, creating short-term day trading opportunities. However, from a swing perspective, it would be more logical to wait for a structured formation on the higher timeframe, which could take weeks or even months to develop.

Final Thoughts

Bitcoin’s current structure suggests that a deeper retracement toward $30,000 (the channel low) remains a possibility, completing a full bearish wave count before the market resets for a new cycle. While this level may seem extreme, historical patterns and Elliott Wave structure suggest it is a valid scenario.

In the short term, traders may find scalping opportunities within the current price range, but for swing traders, patience is key. Waiting for high timeframe confirmation will provide better buying opportunities at more favorable price levels. Monitoring key support and resistance zones will be crucial in the coming weeks.

Understanding Elliott Wave Theory

Elliott Wave Theory is a technical analysis framework that helps traders identify market cycles and predict future price movements based on crowd psychology. Developed by Ralph Nelson Elliott, the theory suggests that markets move in repetitive wave patterns influenced by investor sentiment.

The theory consists of two main phases: Impulse Waves and Corrective Waves.

Impulse waves follow a five-wave structure, where waves 1, 3, and 5 move in the direction of the main trend, while waves 2 and 4 act as corrective pullbacks. The strongest move is typically wave 3, while wave 5 often marks the final push before a reversal.
Corrective waves follow a three-wave (A-B-C) pattern, moving against the trend and signaling a retracement or market reset.
The structure of these waves helps traders identify trend continuation or potential reversals, providing a framework to navigate price action.

Traders use Elliott Wave Theory alongside support/resistance levels, Fibonacci retracements, and market sentiment to anticipate price movements. While not an exact science, it offers a structured approach to analyzing market trends, trend exhaustion, and possible turning points, helping traders improve their decision-making and risk management.

Hope this analysis helps.

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