Technical analysis by EIP-EverythingIsPlanned about Symbol BTC: Sell recommendation (1/5/2025)

### Bitcoin Technical Analysis: Anticipating a Correction from 98K to 88K #### **Current Market Context** Bitcoin has shown a remarkable rally, reaching $98,000, driven by strong momentum, increased institutional participation, and retail euphoria. However, technical indicators suggest a potential correction to $88,000 before the next leg upward. Here's why: --- #### **1. Overbought Conditions** - **RSI (Relative Strength Index):** On the daily chart, Bitcoin's RSI has surged above 85, indicating extreme overbought conditions. Historically, such levels have preceded short-term corrections as the market cools down. - **Stochastic Oscillator:** The stochastic also shows a bearish divergence, where price makes higher highs, but the indicator forms lower highs. --- #### **2. Key Resistance at 98K ** - **Fibonacci Extension Levels:** Using the previous swing low at $75K and the recent high at 98K , the 2.618 Fibonacci extension aligns with the current resistance zone, signaling a potential reversal area. - **Psychological Level:** $100K is a major psychological barrier. Traders often front-run such levels, leading to selling pressure just below it. --- #### **3. Volume Profile** - **Decreasing Volume:** The rally to 98K has been on declining volume, indicating weakening buying interest. A healthy uptrend typically requires increasing volume to sustain higher prices. - **Volume Gap Below $90K:** There is a visible volume gap in the range of 88K –$90K, which could act as a magnet for price as it seeks strong support. --- #### **4. Moving Averages and Support Levels** - **Exponential Moving Averages (EMA):** The 21-day EMA is currently at 87K , aligning with the projected correction target. A reversion to this EMA is consistent with Bitcoin's behavior in prior bull markets. - **Support Zone:** The 88K region coincides with a strong support level from prior consolidation, making it a logical area for a pullback. --- #### **5. Elliott Wave Analysis** - **Wave 4 Correction:** If we are in an Elliott Wave impulse structure, the current move to 98K could mark the end of Wave 3. A Wave 4 corrective phase to 88K is plausible before the continuation into Wave 5, targeting new highs above $100K. --- #### **6. Bearish Candlestick Patterns** - On shorter time frames (4-hour and daily), Bitcoin has formed a bearish divergence and a potential "shooting star" or "doji" near 98K , both indicative of a reversal. --- #### **Conclusion** A correction to 88K would provide a healthy reset for Bitcoin's bull run, allowing new buyers to enter and setting the stage for a sustainable breakout above $100K. Traders should monitor key levels and indicators like RSI, volume, and moving averages for confirmation of the correction. **Key Levels to Watch:** - Resistance: 98K , $100K - Support: 88K , $85K **Strategy:** Consider taking partial profits at current levels and re-entering near 88K with stop-losses placed slightly below $85K.