BTC has reached our next downside target – the 1.618 Fibonacci extension at 29,280. As we discussed in our last update [see: Jan 12 BTC Update]:

As we noted [in our Jan 7 update] after it reached the 40,138-40,180 target range, if it can’t hold 40,180, then we could look for a backtest of the 1.618 around 30,000… It would first have to drop back through the pink channel top, currently at 31,333.

It remains to be seen whether yesterday’s 30,261 lows were close enough to the blue 1.618 extension at 29,890 to count. I think there’s a better than average chance it’s not done yet.

It wasn’t. BTC bounced sharply for 3 days before coming back to tag the 1.618 extension. It has since rebounded to the pink channel top. Now the fun part starts.

continued for members…If the pink channel top backtest results in a reversal, there are two primary downside targets in the near-term: the 1.272 Fib extension at 24,165 and the rising red TL which will reach that same Fib around Feb 1. We can also draw a falling channel which would intersect there. The yellow dot marks the intersection of the three chart features.

We could also draw a falling wedge which would reach 24,165 around Feb 28. Coincidentally, it would also intersect there with the midline of the rising pink channel.Here’s a daily version.

If our cycle model is correct, BTC would reach a cycle low in early October and couldn’t make new highs until at least after that, but ideally in mid-July 2022.

Rejoining the pink channel after breaking out of it is a bearish development.  If it were to reach 24,165, it would also be backtesting the rising blue channel – an even more critical level of support.Stay tuned.