Bitcoin is currently at a crucial juncture, defending the $62,800 to $63,600 zone. This area is vital, as a failure to maintain it could see the cryptocurrency plummet towards the $60,000 to $62,000 range. Despite the current pressure, the long-term projection of $400,000 remains intact if this downturn turns out to be a bear trap.

The cryptocurrency recently bounced off the demand zone after facing rejection at higher levels. How Bitcoin reacts here will be key for its next movement. If it can rally past $64,700, a push towards $66,000 to $67,000 could be on the cards. Alternatively, the market could extend its decline if the demand zone fails to hold.

Following a recent attempt to surpass $64,700, many buyers have found themselves trapped after the rally failed to hold. This event has reinforced the notion that the move towards $65,500 was merely a liquidity sweep, not a precursor to a sustained upward trend. Currently, buyers are focusing on the imbalance and demand area between $62,800 and $63,600. A solid rebound here is essential for shifting momentum back to the buyers’ favor.

Long-Term Outlook Remains Positive

Bitcoin is testing the lower boundary of a long-term rising channel established since the 2018 bear market. Analyst Gert van Lagen suggests that the current situation may represent a third bear trap before a significant upward movement. Historical comparisons with similar breakdowns in 2019 and 2022 indicate that Bitcoin has previously dipped below the channel floor before recovering and moving higher.

According to the Elliott Wave theory, Bitcoin may still be in the fourth-wave correction of a five-wave structure. A recovery from the trendline could support the case for a final fifth wave, with the potential target rising towards $400,000 as the channel expands. However, Bitcoin needs to form stronger monthly highs to validate this projection. If it sustains a breakdown, it would weaken the bullish scenario and suggest further corrections could be on the horizon.

Van Lagen has identified that as long as Bitcoin remains above $31,000, the long-term bullish outlook is technically feasible. However, the ambitious $400,000 target should be viewed as a high-risk projection rather than a confirmed destination.

This material is for informational purposes only and should not be considered financial advice.