Bitcoin’s price is undergoing a correction toward the long-term upward trend. For how long will this correction last, and at which point is the long-term upward trend most likely to continue?
What has caused the start of this correction?
One of the key long-term levels was near $760-80. A long-term downward trend has been forming along that price as far back as 2014. The price of $760-80 has become a key level. The placing of the correction level of the Fibonacci grid 38% has given more significance to that range. That’s why it could be called a historical maximum, which was later confirmed by Bitcoin’s price.
Bitcoin’s price has rebounded from that long-term resistance. The structure of the upward movement was further disrupted near $730 and there was a turn to decline. The overlap of several factors influencing the movement of the price allows us to determine a trend with more certainty. It’s worth noting that the structure of the upward movement was intact right until that line, with the price breaking through every line before it. Only after the new level has been reached and the trend’s structure disrupted and then followed by a turn, it became clear that the market is correcting toward the whole upward trend which has started at $400.
After that, the price has headed toward the minimal correction target near $600. The disruption of the structure at the level of $600 was a confirmation of the downward movement from $780 coming to a close. Soon after a weekly flat has formed between two accumulated volume lines: $580 and $710. These levels have become the limits of a sideway movement, which could become a part of the downward rebound of a larger scale.
In that case, the downward movement has enough potential to reach $480-500. The most significant long-term resistance lines are all situated there: the diagonal channel responsible for the structure of the long-term upward trend, the correctional Fibonacci level 50%, and also the accumulated volume for that price. All these factors combined form a likely peak of the long-term correction. If Bitcoin’s price stops at the level of $480-500 and disrupts the structure of the medium-term downward trend, it will indicate that the long-term correction is most likely over. That means that there will be a chance for a long-term upward trend to continue, or for a turn to decline to start forming.
For the downward movement of the price to continue, it needs to break through a number of technical levels. For the short-term downward trend to become most likely to form, the price has to break the $640 support line. That breakthrough will indicate a disbalance of power between the bears and the bulls, in favor of the bears. Consequently, for an upward trend to form instead, the level of $640 has to stay safe. In that case Bitcoin’s price will have a chance to reach at least $740-750 toward the next key resistance line. In order for Bitcoin’s price to fall to the long-term level of $500, it needs to break through the accumulated volume line of $580, which is also a limit of the weekly flat. A fortification at that mark will indicate a lack of interest from bulls, because the $580 price is profitable for them. Consequently, that lack of interest could provoke a further fall down to $500.
The current state of Bitcoin’s price can be described as a flat within a flat. It’s highly risky to make any long-term decisions under such conditions. The price could form a smaller flat within a larger one, and then continue forming a larger sideways movement between $580 and $710.
The key levels which can help us determine whose side is holding the advantage are the limits of the smaller and larger flats.
If Bitcoin’s price fortifies and forms a turn at the level of $580, the downward correction will be most likely to continue. That fall will end closer to $500, and if a turn forms there, the long-term upward trend will have a chance to renew.
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