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The Bitcoin price is still ping-ponging between support and resistance, but is still moving in favor of the bulls at this point. This is due to the fact that the price is still holding well above $100,000, and this is a psychological level that could be a determinant of a bull or bear move. Amid this, crypto analyst Xanrox believes that the Bitcoin price is headed down after hitting its new all-time high close to $112,000, and this downtrend would push altcoins down further.
Why The Bitcoin Price Is Breaking Down
The reason for the Bitcoin price decline, as outlined by the crypto analyst, is that the leading cryptocurrency is actually breaking down out of an ascending parallel channel that was formed while the price moved from $74,000 to $112,000. This was seen in the initial downtrend that sent Bitcoin from $111,000 down to $103,000, before the relief rally.
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In addition to the ascending channel, the crypto analyst also points out the formation of a symmetrical triangle inside the channel. This is also important to keep an eye on since symmetrical triangles are known for sweeping liquidity. While these liquidity sweeps are not one-sided, it is still notable as it can sweep liquidity above and below the triangle. Probabilities of the direction of the liquidity sweep increase in a direction depending on whether the bears or bulls are currently dominating.
Xanrox also explains that the Bitcoin price has already completed the five full waves of the Elliot Wave theory, and as such, the next thing is a corrective ABC wave. In this case, it is expected to fall back to the 0.382, 0.500, and 0.618 Fibonacci levels again.
Where To Start Buying
With the expectation that the Fibonacci levels will fall to 0.382, then 0.500, and then 0.618, the first culprit for where the Bitcoin price is expected to fall to is just below $98,000. At this level, the crypto analyst believes that it is time to start buying. In addition to the chart formations, Xanrox also calls out an unfilled Fair Value Gap (FV) at this level, and once it fills, it is a great level to start buying before the next wave to the upside.
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If this decline does happen, then altcoins are expected to actually fall further from here. This would put them at great buy levels as well, especially as altcoins are sitting so close to all-time low levels. However, after the first FVG is filled and there isn’t strong momentum, the second Fibonacci level at 0.500 puts the Bitcoin price at $92,000.
Meanwhile, the third and last Fibonacaill level at 0.618 puts it as low as $87,500. “Usually we want to look for a buying opportunity at the 0.382, 0.500, or 0.618 FIB levels,” the crypto analyst explained.
Featured image from Dall.E, chart from TradingView.com
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