Bitcoin Breaks Out After WXY Correction: Will Ethereum (ETH) Follow BTC's Lead?

Bitcoin Breaks Out After Completing WXY Correction – Will Ethereum Follow Suit?

Bitcoin (BTC) has been on a powerful bullish streak over the past few days, catching the attention of traders and analysts alike. The leading cryptocurrency surged past the $111,000 level, coming within striking distance of its all-time high. The rally has been fueled by both technical and macroeconomic factors, and technical analysts are pointing to two major reasons for the sudden pump.

In this article, we will explore what’s driving Bitcoin’s price, the key Fibonacci levels and zones to watch, and whether Ethereum (ETH) is poised to follow in Bitcoin’s footsteps as it approaches a crucial long-term resistance level.

Bitcoin Completes Major WXY Correction and Sweeps Key Liquidity

One of the main technical catalysts for the current Bitcoin rally is the completion of a WXY corrective wave pattern. This complex corrective formation often appears in prolonged market corrections and, once completed, tends to result in a strong impulsive move in the opposite direction.

In this case, Bitcoin completed the WXY structure at a key support level, aligning with a liquidity sweep below a descending triangle pattern. According to technical analysts on TradingView, this setup created a perfect opportunity to go long, as Bitcoin’s price briefly dipped below the triangle support to shake out weak hands before reversing sharply upward.

This liquidity sweep—a common behavior in institutional trading—grabbed stop-loss orders from retail short-sellers and set the stage for a significant bullish reversal.

Price Targets and Resistance Levels: Eyes on the 0.618 Fibonacci Retracement

As Bitcoin continues its ascent, the next major level to watch is the 0.618 Fibonacci retracement, which is often regarded as a “golden zone” for potential price reversal or profit-taking. This Fibonacci level lies just above current market prices and acts as a strong technical resistance.

In addition to the Fib level, there is a horizontal resistance zone located just below it. This zone, identified on the daily chart, aligns with prior consolidation and volume node peaks, which makes it a high-probability area for a reaction.

For short-term traders, this level offers a strategic opportunity to set limit short orders, anticipating a pullback or at least a consolidation once price reaches this area.

Strategy Note: “We want to see how Bitcoin reacts at the confluence of this Fibonacci level and horizontal resistance. A rejection could lead to a corrective move, while a clean breakout would signal continued momentum,” the analyst said.

Temporarily Bullish Outlook with Caution Ahead

Despite the bullish momentum, many traders remain cautiously optimistic. The recent pump has cleared significant resistance, but the market still faces macro uncertainty—especially surrounding U.S. inflation data, bond yields, and geopolitical developments such as the U.S.–China trade dialogue.

“Bitcoin has room to grow in the short term,” the analyst noted. “But traders should be prepared for possible volatility and observe key resistance zones for confirmation.”

As BTC approaches the 0.618 FIB, it is crucial to monitor price reaction and volume. A failure to break above convincingly could signal a short-term top, potentially leading to a healthy pullback and further accumulation opportunity.

Ethereum’s V-Shaped Recovery Mirrors Bitcoin’s 2020 Breakout

Bitcoin (BTC) Surges Above $100K: Will a Correction Follow the Rally?

While Bitcoin is leading the charge, Ethereum (ETH) is also showing signs of strength. Since bottoming out on April 7, 2025, ETH has been on a V-shaped recovery, closely resembling Bitcoin’s powerful reversal from the March 9, 2020 COVID crash.

What’s more interesting is how Ethereum’s current market cycle (2022–2025) mirrors Bitcoin’s previous bull cycle (2018–2021). In that historic cycle, Bitcoin struggled for months below its 1-week MA50 before finally breaking above the ATH Lower Highs trendline—which led to a parabolic price explosion.

Ethereum is now at a similar technical juncture. Currently, it is testing the 1W MA50 (50-week moving average), indicated by a blue trendline on long-term charts. But the real test lies just ahead: ETH’s All-Time High (ATH) Lower Highs trendline, a diagonal resistance that has capped price action since 2021.

“If Ethereum breaks this major resistance line by the end of the year, we could see a parabolic rally just like Bitcoin experienced in late 2020,” said the analyst.

Could Ethereum Hit a New All-Time High in 2025?

Ethereum has yet to reclaim its former ATH of over $4,800, but with growing institutional interest, the rise of ETH staking, Layer-2 adoption, and network upgrades such as EIP-4844 (proto-danksharding), many believe a breakout could happen within 2025.

Key resistance levels to watch on ETH:

1W MA50 (currently acting as immediate resistance)
ATH Lower Highs trendline (~$2,800–$3,000 zone)
Previous local high at $3,580
Major psychological resistance at $4,000

The bullish case for Ethereum strengthens if it can break and retest these levels with strong volume and support from the broader market sentiment.

Macro Factors Still in Play: CPI, Debt Auctions, and Global Growth

As always, crypto markets do not move in isolation. The macroeconomic backdrop remains an essential component in forecasting medium- to long-term price trends.

Key upcoming events that could influence both BTC and ETH:

U.S. CPI Report – Fresh inflation data may influence Federal Reserve policy expectations.
Treasury Bond Auctions – Poor performance could trigger risk-off behavior and spike yields.
U.S.–China Trade Talks – Any resolution or escalation may impact market risk appetite.
Federal Reserve Speeches and Dot Plots – Investors will be watching for hints about rate cuts or further tightening.

While Bitcoin and Ethereum are showing strong bullish momentum, analysts caution that any negative macro surprise could derail the current rally.

Conclusion: Bitcoin Leads, Ethereum May Follow

Bitcoin’s recent breakout above $111,000 was driven by a completed WXY correction and liquidity sweep below a descending triangle, setting up a textbook long opportunity. The next critical test lies at the 0.618 Fibonacci level and nearby horizontal resistance.

Meanwhile, Ethereum is at a key turning point, mirroring Bitcoin’s historical price behavior before its last parabolic rally. If ETH can clear its ATH Lower Highs trendline, it may be setting the stage for a massive upside breakout by the end of 2025.

The overall crypto market remains bullish in the short term, but macro events this week—particularly U.S. inflation data—will likely dictate whether Bitcoin and Ethereum can sustain their momentum.