Bitcoin has traded in a range between $56000 and $60000 over the last week. It needs to break either side to resume its next leg and probabilities remain for a drop towards $37000. The crypto seems to have carved a lower high around $60000 mark as bears prepare to take control.
The daily chart presented here confirms a religious uptrend since $3850 lows registered in March 2020. Bitcoin might have terminated a larger degree Wave (3) around $61781 recently. If correct, bears might be inclined to carve Wave (4) lower towards $37000 mark at least.
Also, note that $37000 is close to Fibonacci 0.382 retracement of the rally between $3850 and $61780 levels respectively. Furthermore, it is a general guideline for the 4th wave to terminate around Fibonacci 0.382 retracement of 3rd wave.
If the above structure unfolds accordingly, a corrective drop might resume soon towards $37000/500 levels in the next few weeks. Bulls can resume Wave (5) higher thereafter, and push through $65000 levels.
Alternately, if Bitcoin has managed to terminate larger degree Wave (5) around $61781 mark, the crypto might be preparing to reverse lower in a big way. If correct, the drop might reach up to $25000 mark before finding any support.
Further, a break below $25000 would be considered as a larger trend reversal since one-year trend line support will be taken out. It might also open doors for a drop towards $15000 levels in that case.
Finacademy Technical Team
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