Bitcoin peaked at $49,000 on January 11 but quickly came crashing down. At first, it attempted to stabilizeat around $41,000, moving sideways, but it fell to a lower low on January 18, signaling further downward movement.
As of the time of writing, (January 23 2024), it has fallen to $38,610, a decrease of 21% from its recent high. It is still going down, leaving investors and trades questioning whether it will stay above $38,000 or keep dropping.
This recent BTC dip could be a precursor to a larger decline. Our earlier analysis considered a potential drop to $36,000 or lower. Given the current market movements, this scenario now appears more probable.
The subsequent decline suggested sellers were active at these levels. Indeed, the drop to around $41,000 demonstrated that the upward trend was not sustainable.
Since the January 11 high, the price has been in a five-wave downward pattern, suggesting a potential ongoing downtrend. Now, though, with the price reaching the significant horizontal level of $38,700, it might bounce.
Further analysis of the wave pattern suggests another dip, possibly to the $34,700 mark, marking the end of the initial phase of a larger downtrend.
A recovery to $43,000 could occur, representing a corrective phase in the broader downtrend and setting a new lower high. If this happens, a more pronounced fall could happen, driving Bitcoin’s price towards the key support zone at around $35,000.
The downturn could bottom out here, potentially leading to a strong rebound and a new bullish phase. However, a prolonged correction is possible, with prices dropping as low as $26,800.
The reaction at the $36,000 level will be crucial in determining what happens next. A strong recovery from this point could signal the start of a significant uptrend. On the other hand, if the price falls below this level and continues to drop, it would indicate a more extensive correction from recent highs.
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.