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Bitcoin Price Crashes 26% Since All-Time High but BTC Bounces After 130-Day Low

Last Updated 5 seconds ago
Valdrin Tahiri
Last Updated 5 seconds ago

Key Takeaways

  • Bitcoin’s price has fallen since it reached a new all-time high in March.
  • On July 5, Bitcoin fell below its April lows, reaching its lowest price in 130 days.
  • Is the Bitcoin correction almost over, and if not, how long will it continue?

Bitcoin’s price has been in a correction for the past 118 days, creating several lower highs and lower lows. Despite several attempts to stage a recovery, the reigning crypto king has struggled to spark a trend reversal.

Kicking off July on a sour note, Bitcoin continued its unlucky streak by plunging to a 130-day low. However, with BTC bouncing back and eyeing a reclaim of a key support level, the question remains: will the token succeed this time or face yet another rejection?

Bitcoin Breaks Down From Long-Term Support

Bitcoin started July by plunging to the $59,500 horizontal support area and breaking the 260-day ascending support trend line– a critical level that has intermittently acted as both support and resistance since February 2021. 

Should Bitcoin continue its downtrend, considering the 0.382 Fibonacci support level, $51,575 is likely the next target.

Weekly Trading Chart
BTC/USD Weekly Chart | Credit: Valdrin Tahiri/TradingView

Reflecting the downtrend in price performance, technical indicators have also turned bearish. Over the past week, the MACD has formed a lower high, a bearish cross, and is currently declining. 

Similarly, the RSI has also created a lower high and is on the verge of falling below 50. However, it is worth noting that the last time the RSI dipped below 50 in August 2023 was a false signal, as Bitcoin’s price soon initiated an upward movement.

While Bitcoin’s trajectory on the weekly timeframe looks bleak, nothing is set in stone yet, and a price bounce could invalidate it.

Will the Bitcoin Price Finally Bounce?

The daily time frame chart paints a more bullish outlook. Since reaching its all-time high in March, Bitcoin’s decline has been contained within a descending parallel channel, indicating a corrective phase. Recently, the price breached below the channel’s midline, confirming it as resistance (indicated by the red icon) on July 1st.

The channel’s support trend line hovered around $54,600, and the BTC price fell below it on July 5 but bounced afterward, kickstarting the ongoing upward trend. 

The RSI is exhibiting a bullish signal. The indicator fell into oversold territory in June and formed a bullish divergence in July. The previous time this happened was in August 2023. As outlined in the previous section, it triggered a significant upward movement that eventually led to the all-time high Bitcoin price

 

Bitcoin Daily Movement
BTC/USD Daily Chart | Credit: Valdrin Tahiri/TradingView

Similarly, the MACD has also generated a bullish divergence, which is not the case in the current decline. In this case, a wave count can help determine the most likely course of action considering mixed price action and indicator readings from multiple time frames.

Bitcoin Price Prediction – What Does the Wave Count Say?

The most likely wave count suggests the price of Bitcoin is approaching or has already reached the conclusion of a corrective wave four within a larger five-wave uptrend (white), which started from the November 2022 low.

The sub-wave count is in black, implying Bitcoin is in the C wave of an A-B-C corrective structure. Giving waves A: C a 1:1 ratio leads to a low of $52,400. This is also the 0.382 Fibonacci retracement support level when measuring the length of wave three. Extrapolating the trend, the wave count indicates BTC’s price has bottomed out. 

A potential target for the top of the fifth wave is at $86,270, created by the 1.61 external Fibonacci retracement level of wave four (yellow).

Bitcoin Wave Count
BTC/USD 2-Day Chart | Credit: Valdrin Tahiri/TradingView

The short-term wave count aligns with the longer-term one. If the previous count holds true, BTC could have completed the fifth and last sub-wave of the decline (yellow), potentially signaling the completion of the correction.

A Fibonacci support also resides around $55,000, formed by the 1.61 external Fibonacci retracement level of wave four and by sub-wave five being 1.61 times the length of sub-wave one. The subsequent rebound lends credence to this scenario.

Short-Term Count
BTC/USD Six-Hour Chart | Credit: Valdrin Tahiri/TradingView

A reversal and decline below this level will put the count at risk since it will also trigger a breakdown below the long-term descending parallel channel.

Bitcoin’s Correction Could Have Ended

Despite a sharp and lengthy decline, lower time frames indicate that Bitcoin’s price correction could have ended. The oversold indicator readings and bullish divergences, coupled with the wave count and previous fractals of increase, all align to suggest a potential bottom is in place.

While the weekly time frame breakdown is worrisome, the rest of the readings in various time frames are all bullish.

Disclaimer
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.
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