Key Takeaways
The recent price action of AI16Z reveals a complex yet promising Elliott Wave structure, hinting at a potential trend reversal.
The 4-hour chart displays the conclusion of a corrective wave cycle, while the 1-hour chart suggests the initiation of a fresh impulsive wave.
With Fibonacci retracement levels providing critical support and resistance zones, the upcoming sessions could offer decisive clarity.
AI16Z reached an all-time high of $2.46 on Jan 2. However, as its corrective stage began, a downturn followed, leading to a low of $0.91 on Jan 13.
It is in the recovery phase after completing a corrective ABC structure in a descending channel.
The recent rise led to a high of $1.48, an integration with the descending channel resistance.
Notably, the price rebounded sharply from the $1.0 region, which aligns with the 0.618 Fibonacci retracement level, a critical support zone.
The current price structure indicates that the asset attempts to establish a higher low, a precursor to initiating a new impulsive wave.
The 0.382 Fibonacci retracement at $1.52 acts as immediate resistance. A close above this level would confirm a bullish continuation, potentially targeting the next resistance cluster near $1.87 (0.236 retracements).
The Relative Strength Index (RSI) on the 4-hour chart shows improving momentum but has not yet reached overbought territory.
This suggests room for further upward movement if key resistances are breached. However, failure to sustain above $1.237 (0.5 retracement) could trigger a retest of the $1.0 support level.
On the lower time frame, the price action reveals the early stages of an impulsive five-wave structure.
The completion of Wave (i) near $1.476 is followed by a potential Wave (ii) correction, testing the 0.5–0.618 Fibonacci retracement levels ($1.258–$1.197).
If this zone holds, Wave (iii) could extend toward $1.8–$2.0, aligning with Fibonacci extension targets.
The corrective pullback in Wave (ii) aligns with declining RSI momentum, providing a healthy reset for the next potential upward leg.
Wave (iii) is typically the strongest in an impulsive structure and could break above the descending channel resistance, signaling sustained bullish momentum.
Fibonacci projections place the Wave (iii) target near the 1.618 extension at $2.0, with intermediate resistance at $1.8.
In a bearish scenario, a breakdown below $1.197 would invalidate the impulsive wave structure, exposing the price to further declines toward the $1.12 region.