Comprehensive and Detailed Explanation From NCC-Aligned Sources:

A prolonged deceleration is defined by NICHD and NCC as:

A deceleration lasting ≥2 minutes but <10 minutes

Decrease in FHR of ≥15 bpm

Can occur with or without uterine contractions

This tracing shows:

A deep drop in FHR down to ~60–70 bpm

Duration lasting several minutes

Recovery back to baseline

Moderate variability present afterward

Because variability remains present and the tracing does not show:

Absent variability

Recurrent late decelerations

Recurrent variable decelerations with absent variability

Bradycardia for ≥10 minutes

…it does not meet criteria for Category III.

It is also not bradycardia, because bradycardia requires:

Baseline <110 bpm for 10 minutes or longer

Therefore the correct interpretation is a prolonged deceleration.