Bitcoin Poised for an ABC Recovery as Bullish Divergence Builds Momentum

Introduction

Bitcoin (BTC/USD) is showing early signs of recovery after completing a five-wave impulsive decline. The current price action suggests the market may have established a temporary bottom, supported by bullish divergence on the Awesome Oscillator (AO). If this structure remains valid, Bitcoin could enter an ABC corrective rally before the next major directional move.

Elliott Wave Suggests a Completed Five-Wave Decline

The chart indicates that Bitcoin has likely completed Wave (v), finishing a five-wave bearish impulse. According to Elliott Wave theory, a completed impulse is commonly followed by an ABC corrective structure.

The current rebound is expected to develop as:

• Wave (A): Initial recovery from the recent low.
• Wave (B): A corrective pullback toward the 261.8 swap zone.
• Wave (C): A stronger bullish advance targeting the upper resistance zone.

As long as Bitcoin holds above the recent swing low, this corrective scenario remains technically valid.

Bullish Divergence Strengthens the Recovery Outlook

The Awesome Oscillator is displaying a bullish divergence, where price records lower lows while momentum forms higher lows.

This divergence indicates that bearish momentum is weakening despite the decline in price. Historically, this type of momentum shift often appears near market bottoms and frequently precedes corrective rallies.

Although confirmation is still required, the momentum structure currently favors additional upside before sellers regain control.

Key Technical Levels to Watch

Several important price zones could determine Bitcoin’s next move:

• 261.8 Swap Zone: Expected support during Wave (B).
• 161.8 Resistance Zone: First upside objective for Wave (A).
• Upper Resistance Zone: Primary target for Wave (C) if bullish momentum continues.

A successful pullback that respects support would strengthen the probability of the projected ABC recovery.

Conclusion

Bitcoin appears to be transitioning from a completed bearish impulse into a corrective ABC recovery. The presence of bullish divergence on the Awesome Oscillator further supports the possibility that downside momentum is fading.

Traders should monitor the upcoming Wave (B) retracement closely. If buyers defend the support zone successfully, Bitcoin could continue toward higher resistance levels as Wave (C) unfolds. However, a break below the recent low would invalidate the current bullish correction scenario and suggest renewed bearish pressure.