Figure 1. Bitcoin daily charts with detailed EWP count and technical indicators.
A Revisit of 29K is still possible
All corrections consist of at least three waves: a, b, c. See Figure 1A. Corrections are either 2nd or 4th waves. Allow me to explain. BTC topped out on September 7 at $52919 and lost 17% intra-day (red, intermediate wave-a). Then it rallied in an overlapping fashion to $48788 on September 17 (red, intermediate wave-b) and then dropped yesterday and today again to $40213 (red, intermediate wave-c). In this case, today’s low (wave-c) equaled almost precisely the length of wave-a measured from the top of wave-b (red arrow).
This length is a typical relationship for what in EWP-terms is called a zigzag correction. Besides, BTC has retraced almost precisely 50% of the rally that started in June at today’s low. In this case, I count that rally as a more significant 1st wave (black, major wave-1) as it can be assessed as having made five waves up (the five red, intermediate waves i, ii, iii, iv, and v). The current decline is then major wave-2, which could have been completed as there is now the required minimum of three waves down with a classic internal relationship. The 50%, as mentioned earlier, retrace of wave-1 is also typical for a 2nd wave.
However, Figure 1B shows the BTC Bulls are not out of the woods just yet, as the September 7 high at $52919 could also have been a more significant b-wave bounce. That means the cryptocurrency is now working its way down back the $29K region for a c-wave of a more enormous (blue) Primary-IV wave. Remember, corrections are always at least three waves, and in this case, I assess BTC having topped in April and not in March as with the Bullish option. This bearish option then allows for three waves: wave-a to the June low, wave-b to the recent September high, and now wave-c is underway. A further breakdown in price, especially below $37220 towards the shown 161.80% extension at $33255, will make this option my preferred path.
The Bulls would need to see BTC hold above $37220 and see a rally back above Saturday’s $48788 high to tell us the current three-waves down pattern have completed and a retest of $53K is in the cards. From an EWP perspective, BTC will ultimately have to break above $56K to know that larger wave-3 is underway. But, before that my indicators will have moved from down to up, from sell to buy, and my automated crypto trading alerts will have given a buy signal long before that as well.
Bottom line: Bitcoin’s price chart still has a bearish potential that can target as low as $29K before the run to $90K+ finally gets going. A continued move down towards the mid-30Ks will undoubtedly increase those odds. However, my preferred view remains that BTC has bottomed and is now working through a corrective 2nd wave that sets it up for the next launch to $75K. A breakout above Saturday’s $48788 high tells me the current three waves down pattern has been completed, which increases the odds of a new impulse higher tremendously.
*Please remember, my work is ~70% reliable and ~90% accurate. Plenty enough to give my premium crypto trading members an edge. But we must, therefore, have realistic expectations and not expect perfection and zero bad calls in a dynamic, stochastic, probabilistic environment. Therefore, all we can do is “anticipate, monitor, and adjust if necessary.”
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