Bitcoin’s meteoric rise to an all-time high of $108,353 in December 2025 has been followed by a sharp correction, with the price dropping over 10% and briefly dipping below the $100,000 milestone. This sudden pullback has sparked widespread debate among traders and analysts: Is this merely a healthy consolidation within an ongoing bull market, or is it the beginning of a broader reversal?
The recent decline, which saw Bitcoin fall to a low of $95,700, coincided with record outflows from spot Bitcoin ETFs—totaling $680 million in a single day. Notably, this wasn’t driven by a single entity like Grayscale alone, but by eight different ETF providers liquidating positions. This broad-based selling pressure suggests growing caution across institutional players.
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But before jumping to conclusions, it’s essential to analyze both technical indicators and long-term structural patterns to assess whether this dip presents a buying opportunity or a warning sign.
Bitcoin’s Price Action: Bullish Momentum Meets Resistance
Since August 5, Bitcoin has surged over 120%, breaking out of a long-term descending parallel channel in November—a pattern that had held for 217 days. This breakout marked the beginning of an aggressive upward phase that lasted 63 days and culminated in the December peak.
The height of this rally reached the 1.61 external Fibonacci retracement level, a historically significant resistance zone where previous market tops have formed. Rejection at this level often signals exhaustion in bullish momentum, making it a plausible candidate for a short- to medium-term top.
On the weekly chart, technical indicators are sending mixed signals:
- The Relative Strength Index (RSI) shows bearish divergence despite being in overbought territory—an early warning sign seen before past cycle peaks.
- Conversely, the Moving Average Convergence Divergence (MACD) remains bullish, with no divergence yet recorded. In prior cycles, MACD divergence preceded major reversals, so its current strength suggests the uptrend may not be over.
This divergence between RSI and MACD creates uncertainty. While price action hints at weakening momentum, the underlying trend structure remains intact. A decisive weekly close below key support could confirm the start of a deeper correction.
Elliott Wave Analysis: Are We in the Final Phase?
One of the most compelling frameworks for understanding Bitcoin’s current position is Elliott Wave Theory. According to this model, Bitcoin is likely in Wave 5—the final leg of the bull cycle that began in December 2022.
There are two plausible interpretations:
- Wave 5 has already completed, matching the combined length of Waves 1 and 3. This would imply the top is in, especially given the rejection at the 1.61 Fibonacci extension.
- Wave 5 is still unfolding, with the current drop being part of Wave 4 correction, setting up for one final upward surge.
The latter scenario aligns with a more granular sub-wave count showing a series of 1-2/1-2 structures forming a parabolic ascending support line. The recent breakdown from this trendline suggests Wave 4 may have begun.
A typical target for Wave 4’s bottom lies around $85,825, corresponding to the 0.382 Fibonacci retracement level of the entire upward move. However, Wave 4 could also develop as a sideways triangle pattern—common after strong Wave 3 advances—indicating consolidation before a final blow-off top.
Historically, Wave 2 corrections were deep; the principle of alternation suggests Wave 4 will likely be shallow and time-based rather than price-intensive. This supports the idea of a sideways grind rather than a crash.
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Could Bitcoin Rally to $140,000?
Despite the current correction, some technical counts suggest there’s still one more high left in this cycle.
If Wave 4 concludes near $85,825–$90,000 and holds as support, the subsequent Wave 5 impulse could extend to $130,000–$140,000, especially if fueled by renewed institutional inflows or macroeconomic tailwinds such as rate cuts or increased adoption.
Such an extension would make Wave 5 approximately 1.61 times the length of Waves 1 and 3 combined, fitting within standard Fibonacci projections for terminal waves.
Moreover, if Bitcoin enters a sideways Phase 4 correction (triangle formation), it could trigger a minor altcoin season, as capital rotates into smaller-cap cryptocurrencies during periods of BTC stagnation—a pattern observed in previous cycles.
Key Factors to Watch
Several macro and on-chain indicators will help determine whether this correction is temporary or structural:
- ETF Flow Trends: Continued outflows could signal waning institutional confidence, while renewed inflows may reignite bullish momentum.
- On-Chain Holder Behavior: Are long-term holders accumulating or distributing? Stable wallet balances suggest strength.
- Market Sentiment: Extreme greed often precedes corrections; monitoring sentiment tools can provide contrarian signals.
- Macro Environment: Interest rates, inflation data, and regulatory developments remain critical drivers.
FAQ: Understanding Bitcoin’s Current Correction
Q: Why did Bitcoin drop below $100,000?
A: The drop followed record ETF outflows totaling $680 million across eight providers, combined with technical resistance at the 1.61 Fibonacci extension level and bearish RSI divergence.
Q: Is this the end of the Bitcoin bull run?
A: Not necessarily. While some indicators suggest a top may be forming, Elliott Wave analysis indicates a possible final upward leg after a Wave 4 correction—potentially pushing BTC toward $140,000.
Q: How low could Bitcoin go in this correction?
A: The most likely support zone is between $85,825 and $90,000—the 0.382 Fibonacci retracement level—especially if Wave 4 unfolds as expected.
Q: What does a sideways correction mean for altcoins?
A: Historically, prolonged BTC consolidation phases have led to increased altcoin activity, sometimes triggering a "minor altseason" as traders seek higher returns elsewhere.
Q: Should I buy Bitcoin now or wait?
A: Waiting for confirmation of a bottom—such as a sustained close above $98,000 or bullish reversal patterns near support—may offer better risk-reward than catching a falling knife.
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Final Outlook: Correction or Capitulation?
Bitcoin’s 10% pullback from its all-time high reflects typical behavior near cycle peaks. While momentum indicators show signs of fatigue, structural analysis suggests the possibility of one final surge remains alive.
Traders should monitor:
- Weekly closing prices
- ETF flow data
- RSI and MACD behavior
- Key Fibonacci levels
The coming weeks will be critical. A bounce from major support could reignite bullish sentiment. Conversely, a breakdown below $85,825 might signal a more profound reversal.
For now, patience and disciplined risk management are key. Whether you're holding through volatility or looking for entry points, understanding the broader technical landscape helps navigate uncertainty with confidence.
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