Bitcoin (BTC) Falls Below $79,000 as Oversold Conditions Signal a Potential Rebound

Key Takeaways

• Wave 4 is nearing completion after a sharp decline.
• Key Fibonacci levels tested for potential reversal.
• An oversold RSI indicates a possible short-term bounce.
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Bitcoin has sharply declined, completing an extended correction that aligns with Elliott Wave Theory.

The 4-hour chart illustrates a significant Wave 4 retracement, testing key Fibonacci levels.

Meanwhile, the 1-hour chart suggests a potential reversal zone forming. This analysis delves into BTC’s current structure, key price levels, and the outlook for the next move.

BTC Price Analysis

Bitcoin’s corrective decline is in its final stages, with Wave 4 completing a complex WXYXZ pattern.

The sharp drop tested the 0.5 Fibonacci retracement level at approximately $79,500, a crucial support zone.

Historically, Bitcoin’s Wave 4 corrections have been deep, often reaching the 0.5 or even 0.618 retracement levels before reversing.

The 4-hour RSI is currently oversold, sitting near 25, indicating selling exhaustion. This suggests that Bitcoin may be due for a relief rally.

Additionally, BTC has tested multiple historical support levels, including the previous breakout zone near $78,000-$80,000.

Looking at Fibonacci confluences, the next major retracement levels lie at $73,000 (0.618) and $64,000 (0.786), should the decline persist.

On the upside, BTC needs to reclaim $85,800 (0.382 Fibonacci) to confirm a potential reversal. A successful bounce from the current level could initiate Wave 5, targeting higher Fibonacci extensions.

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The overall market structure remains bullish, as the Wave 4 correction follows an extended Wave 3 rally.

If this level holds, a new impulsive move could begin, targeting new highs in the next wave cycle.

BTC Price Prediction

On the lower time frame, BTC is exhibiting early signs of a potential reversal, with the 1-hour chart forming a possible bottom near the 1.618 Fibonacci extension ($78,772).

This zone aligns with prior strong support, increasing the probability of a local bottom.

If BTC holds this level and breaks above immediate resistance at $85,848 (0.382 Fibonacci), we could see a short-term recovery targeting $90,000 (1.0 Fibonacci retracement) and eventually $95,200 (0.786 retracement from the recent drop).

An Elliott Wave structure suggests that Bitcoin could form a new impulse wave to the upside.

However, if Bitcoin fails to maintain support above $78,000, further downside could extend to the 0.618 Fibonacci retracement at $73,196.

A breakdown below $73,000 would invalidate the bullish scenario and suggest a deeper correction toward $64,000 (0.786 Fibonacci).

The RSI on the 1-hour chart is also at extremely oversold levels, reinforcing the possibility of a short-term bounce.

A bullish divergence on RSI would further confirm a potential reversal, making $85,800 a key resistance to watch for bullish confirmation.

Key Levels to Watch

• Immediate Resistance: $85,848 (0.382 Fibonacci retracement).
• Key Resistance: $90,893 (1.0 Fibonacci retracement).
• Critical Resistance: $95,207 (0.786 Fibonacci retracement).
• Immediate Support: $78,772 (1.618 Fibonacci extension).
• Key Support: $73,196 (0.618 Fibonacci retracement).
• Critical Support: $64,189 (0.786 Fibonacci retracement).
• Short-Term Target for Wave 5: Above $100,000 if momentum sustains.
• Invalidation Zone: Below $73,000, signaling further downside potential.