Has Bitcoin (BTC) Completed the Correction? – Elliott Wave Analysis

BTC has been correcting for almost a year, since the April 14, 2021 high to be precise. It is possible that this correction is over.

Long term adjustment

BTC started a long-term five-wave bullish (white) impulse in December 2018. The most likely scenario suggests that wave three completed on April 11 and BTC has since corrected within wave four.

Due to the rotation concept, waves two and four should differ in time or price movement. Since the waves are of similar duration (263 days and 281 days), it makes sense if they differ in their retracement levels.

Wave two is deep, reaching the 0.86 Fib (white) retracement level. Keeping the concept above in mind, it makes sense that wave four is flatter, ending at the 0.5 Fib retracement level (black), where price was touched during the recent decline.

BTC/USDT 3-day chart | Source: TradingView

Analyst @24kCrypto has published a BTC chart showing the price completing a long-term wave 4 triangle.

He also pointed out that the RSI has provided a bullish signal signaling a bottom for BTC in March 2020.

The source: Twitter

While it looks like BTC is in a long-term wave 4, there still appear to be some valid sub-wave numbers that could occur.

The three most likely wavenumbers are shown in the image below.

A sharp correction (black) indicates that the price will form another bottom. The horizontal correction (yellow) shows that a bottom has been made, but BTC will continue to consolidate, while the red line shows that a bottom has been made and the price has completed the correction.

Below, these three wavenumbers are analyzed in turn to decide which wavenumber is most likely to occur. Click here to view our previous wave count analysis.

BTC/USDT 3-day chart | Source: TradingView

Sharp adjustment

The most likely downside is that BTC is in an erratic flat corrective pattern. This means that wave A:C will have a 1:1.61 ratio, resulting in a final low of $12,345.

The number of partial waves is shown in black, indicating that BTC is in the third partial wave. On this possibility, the price will fall below the channel and confirm it as resistance before resuming the downward movement.

BTC/USDT daily chart | Source: TradingView

However, this is not consistent with the concept of rotation discussed above, as waves two and four will have very similar retracement levels, both falling to the 0.85 Fib retracement support.

Eventually the $12,346 low will break the top of wave one (red line), hence an invalid correction based on Elliott Wave Theory (EW).

BTC/USDT 3-day chart | Source: TradingView

Horizontal adjustment

The possibility of neutrality shows that BTC is stuck in a triangle that contains wave 4.

In this case, BTC will surge towards $55,250, 0.618 Fib retracement resistance before falling again. The entire move will complete a symmetrical triangle from which a breakout is likely.

Aside from the fact that the correction could take almost 400 days, this possibility does not violate any of the EW rules.

BTC/USDT daily chart | Source: TradingView

Customized

The final and most likely possibility is that BTC has completed the 4th long-term wave within the current ascending parallel channel. Among them, wave A:C has a ratio of exactly 1:1, which is the most common in such corrections.

This completes the running flat correction pattern.

BTC/USDT daily chart | Source: TradingView

The main problem with this number of waves is the short-term movement. Since the January 24th low, the next bounce was a three-wave structure rather than a five-wave structure.

This means that BTC will hit a slightly higher bottom near $34,000 but will still respect the channel or triangle pattern outlined above.

Short-term volatility over the next few days will determine which of these three choices will prevail.

BTC/USDT 3-day chart | Source: TradingView

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page