Bitcoin has been in a sharp downtrend lately, dropping over 50% in the past four months. Many people didn’t expect this level of volatility, especially newer investors who believed ETFs would smooth out Bitcoin’s price swings. Reality check: this market is still extremely volatile.
In fact, there’s a real chance that many ETF investors could be sitting on heavy losses later in 2026 if Bitcoin continues to slide toward the lower end of these products’ historical ranges.
My Short-Term View: More Downside Likely
Short term, I remain bearish and there are two main reasons why I think Bitcoin is likely to move lower in the coming days or weeks.
First, Bitcoin hasn’t yet reached the 0.618 Fibonacci retracement of the previous bull cycle (2022–2025). That level sits around $57,772, and historically, price tends to gravitate toward this zone during deeper corrections. Right now, it looks like a clear magnet.
Second, price still hasn’t tagged the lower trendline of the descending parallel channel visible on the chart. Before I’d feel comfortable expecting any sustained upside, I’d want to see at least one of these conditions met, either a touch of that channel support or a move into the 0.618 fib level.
Elliott Wave and Momentum Signals
From an Elliott Wave perspective, this entire move still looks corrective, even though it’s been aggressive. I believe we’re missing the final (Y) wave of a complex W–X–Y correction.
On top of that, the RSI is oversold, but there’s still no bearish divergence yet. That’s another red flag for me. Until divergence appears, I don’t see confirmation that downside momentum is exhausted.
Because of this, my short-term target remains around $57K. Big players, banks and institutions need liquidity before pushing price to new highs. And the easiest way to get that liquidity is by running stops.
A $60K Flash Drop and Right Back Up
Bitcoin reminded everyone how fast it can move.
Late last week, price plunged to around $60,000, wiping out thousands of long positions in the process. Then, just as quickly, it bounced, climbing back above $70,000 within a day.
That dip marked Bitcoin’s lowest level since October 2024 and put it roughly 52% below the $126,000 peak. By Monday, price looked almost calm again, hovering near $70,700. Classic Bitcoin behavior, violent moves followed by eerie quiet.
Buy the Dip or Call It Dead?
As always, opinions split instantly. Some declared Bitcoin “dead” (again). Others quietly bought the dip, viewing it as another textbook shakeout of weak hands.
The bounce was strong, about 18%, but conviction still feels fragile. Optimism is there, but it’s cautious.
Volatility Isn’t a Bug, It’s the Feature
This kind of volatility is nothing new. Bitcoin fell hard from its peak despite institutional adoption accelerating and a crypto-friendly political backdrop.
That’s reignited the debate:
Is Bitcoin digital gold?
Or just a high-volatility risk asset during times of stress?
The jury is still out.
Key Levels to Watch:
Right now, a few levels matter more than anything else:
• $60,000: Major near-term support. Bulls really don’t want to see this tested again.
• $58,000: Near the 200-week moving average, a historically critical long-term support.
• $73K–$75K: Heavy resistance. A clean break above this zone would shift momentum back toward bulls.
• $81,000: Potential upside magnet if sentiment improves and resistance clears.
Institutions aren’t panicking
Interestingly, while price action grabbed headlines, ETF flows told a quieter story. On February 6 alone, $221 million flowed into U.S. Bitcoin ETFs. That suggests some institutions viewed the selloff as an opportunity, not a warning sign.
That doesn’t guarantee higher prices, but it does help stabilize sentiment when nerves are stretched thin.
Final Thoughts
Bitcoin bouncing from $60K showed that buyers are still around, but it hasn’t proven strength just yet. Until key downside targets are tested or momentum confirms a reversal, caution is warranted.
So now I’ll throw it back to you👇
Are you holding your Bitcoin, looking at altcoins, or staying on the sidelines for now?
Drop your altcoin pick in the comments and hit like, I’ll break it down for you.
Trading isn’t hard when you have a solid framework and clear levels.
Wishing you smart, disciplined, and profitable trades.