Bitcoin and the next Crypto Bull Market
Bitcoin is without a doubt a coin of the future and a way for people to pay for goods by diverting from fiat money. It could also be one of the most important investments of our lifetime.
There are speculators out there who state that BTC is a ticking bomb and that this bubble would burst as never seen before in previous market contractions. Come to think of it, those individuals rang that alarm back in October 2017, when BTC/USD was pricing around $5500. After that, Bitcoin topped an outstanding $19,783.06 reading on December 17th, 2017.
Is it dangerous to invest in Bitcoin or other cryptocurrencies?
BTC/USD dropped in value drastically ever since it peaked, with present prices showing approx. $6500per one Bitcoin.
According to the technical analysis shared below, BTC/USD could show more weakness ahead, before the “crypto bulls” would return.
The simple answer to the question above is: “not if one has patience”.
In the lines to come, an in-depth technical analysis is presented, by using one of the most reliable leading analysis tools out there: the Elliott Wave principle.
As per the current technical analysis, Bitcoin could continue the bearish corrective cycle towards approx. $3500 levels, where a new bullish rally could commence, one which could easily exceed the previously witnessed all-time-high.
Bitcoin – Full Cycle & Elliott Wave Analysis
Part 1 – Weekly Chart – Cycles & The Big Picture
BTC/USD – Weekly Chart (picture)
From an Elliott Wave standpoint, and also from the technical perspective, it can be established that the former bullish parabolic swing represents the dominant trend. The down-trend presents multiple overlaps and corrective characteristics, making it a corrective bearish sequence.
In technical analysis, the bearish sequence could represent a “healthy” retracement, one which would be needed if BTC/USD were to resume its bullish destiny.
The all-time-high and peak for BTC/USD seen on December 17th, 2017 has been labeled as Cycle Wave I (black). Moving towards the bearish corrective cycle, this wave has been labeled as Cycle Wave II (black).
Cycle Wave I (black) started ever since the beginning and completed its Motive Wave sequence along with its peak. It is mandatory to state that this not just any Motive Wave, it’s a Bullish Impulse.
The previous rally presents all the characteristics of an Impulse, and this is giving a fellow trader or investor a very valuable hint, thus resulting in thinking that the next bullish cycle would take a Wave III form.
Cycle Wave III’s (black) swing could present an Extension in its impulsive sub-waves, hence the reason why, from a mathematical and Fibonacci point of view, BTC/USD could increase 10 times in value from the price it would bottom out.
The bigger picture points towards the possibility that BTC/USD could rise towards the $35,177.20 levels, from around the $3,310.47 levels.
When would BTC bottom out?
For a clearer view and less noise, the corrective cycle would need to be analyzed carefully.
Cycle Wave II (black) has been labeled and classified as a Complex Corrective Structure, more exactly as a Triple Three in its Primary WXYXZ (red) sub-waves.
The Triple Three Pattern seems to be delimited by a Descending Channel, with the lower parallel trend-line pointing towards the next best point of interest.
According to the weekly chart, Bitcoin/US Dollar could continue falling in a bearish impulse towards the $3500 vibration zone, where it would be expected to react violently and resume the dominant trend, with a never-seen-before rally.
Furthermore, the Daily chart will be closely examined, thus zooming in and getting even closer with this very courageous view on Bitcoin.
BTC/USD – Weekly Interactive Chart
Part 2 – Daily Chart – Bearish Correction & Projections
Cycle Wave II (black) – Elliott Wave Analysis
BTC/USD – Daily Chart (picture)
BTC/USD, as previously mentioned in Part 1, has been unfolding with a downwards momentum ever since the peak back in October 2017.
The down-trend has been classified as a Complex Corrective Structure, more exactly as a Triple Three in its Primary WXYXZ (red) sub-waves.
Primary Wave W (red) unfolded as a Zig-Zag pattern, with a sharp reaction in Intermediate (A) (orange), then followed by a Double Three correction in the Minor WXY (purple) sub-waves of Intermediate (B) (orange). Intermediate (C) (orange) commenced a very powerful five-swings sequence, one which reached as low as $5920.01 levels, thus officially shaking the crypto market to its core.
Primary X (red) represents the failed attempt for a bullish continuation and it shows the typical three-swings sequence in its (A)(B)(C) (blue).
As the corrective structure became more and more complex, Primary Y (red) has also been unfolding as a Zig-Zag pattern, but with Intermediate (A) (orange) presenting a Leading Diagonal. Intermediate (B) (orange) presents a Simple Corrective Structure, with an Extension in its Minor C (blue) sub-wave. Intermediate (C) (orange) represents the effect of the second failed attempt for the BTC bulls to regain control and consist of a clean five-swings sequence in its Minor 12345 (red) sub-waves.
BTC/USD tried the third time to start a bullish trend, however, the second Primary X (red) in the overall Triple Three structure also failed to break-out of the Descending Channel.
After these three attempts to break-out of the Descending Channel, it seems as if BTC/USD could be gaining even more bearish momentum.
The last leg within Primary Z (red) would also need to be formed out of a three-swings sequence, thus resulting in labeling the first drop as Intermediate (A) (red).
Because of the fact that Intermediate (A) (red) presents a five-wave sequence as well, and also because the entire structure is corrective by nature, Primary Z (red) would also present a Zig-Zag pattern. This would result in classifying the entire correction in Cycle Wave II (black) as a Triple Zig-Zag.
Intermediate (B) (red) also presents a Simple ABC correction, retracing a considerable amount of Intermediate (A) (red), but getting rejected by the upper trend-line of the Descending Channel.
Primary Z (red) would be located at current times in bearish Intermediate (C) (red), and would unfold as a five-swings sequence, in an impulsive manner.
Intermediate (C) (red) already shown the first leg downwards and the retracement of that, with Minors 1 and 2 (red) finalized.
Moving forward, Minor 3 (red) could continue the bearish sentiment towards the $4800 levels, where the 100% Fibonacci Extensions of Intermediates (A) & (B) (red) would allow Minor 4 (red) to retrace approx. 38.2% of Minor 3 (red).
It can be noticed from most, if not all, of BTC’s impulsive swings, that wave five is actually the strongest. This fact could reflect towards BTC/USD finding its bottom below the $4200 levels and could even reach as low as $3500 levels.
During Part 1, the long-term view was shared and presented, and during this part (Part 2), a medium-term view has been covered.
Further to come, Part 3 will contain the short-term view and analysis, on the 2H time-frame.
BTC/USD – Daily Interactive Chart
Part 3 – 2H Chart – The Last Sell-Off and The Big Rise
Intermediate (C) (red) – Elliott Wave Analysis
BTC/USD – 2H Chart (picture)
Minor 1 (red) breached through the Ascending Channel in Intermediate (B) (red), and thus, a new bearish door has been opened for BTC/USD. Minor 1 (red) shows an extension in Minute iii (red) and a Triangle in Minute iv (red).
Minor 2 retraced the default 50-61.8% Fibonacci Retracements of Minor 1 (red), unfolding within an Ascending Channel, in Double Three, within its WXY (purple) sub-waves.
Minor 3 (red) already commenced a possible bearish impulse, with Minute i (red) hovering around the lower trend-line of the Channel, awaiting the breach and the sell-off confirmation.
Should the breach occur, within Minor 3 (red), Minute ii (red) would be expected to retrace and retest the Channel with a 61.8% pull-back towards approx. $6500.
Minute iii (red) could reach lower, towards the 100% Fibonacci Extensions of Minors 1 & 2 (red), which would reflect the $5500 vibration zone.
Minute iv (red) would retrace approx. 38.2% of Minute iii (red), after which Minute v (red) could reach as low as $4800 levels before a retest of the $5500 levels.
As this projected impulse would unfold, and if the analysis would be on track with the mentioned projections, then BTC/USD would bottom out at or around the $3500 levels, along with Minor 5 (red).
BTC/USD – 2H Interactive Chart
BTC/USD Summary:
Short and medium-term: Bearish from the $6500 levels, towards the $3500 levels.
Long-term: Bullish from the $3500 levels, towards an amazing bullish journey, projecting as high as $35000 levels.