Bitcoin (BTC) fell sharply between February 13 and February 20, erasing several upside moves in the process.

Bitcoin bull market cycle

Bitcoin has been in a bull market cycle since December 2018 when it just fell to $3,122. The uptrend developed in five waves (white), of which Bitcoin is currently in the fourth wave.

While it looks like Bitcoin is in wave four, is it still uncertain if wave four is over or not?

This article will analyze several possible wave four formations to determine this.

BTC/USDT weekly chart | Source: TradingView

Done tuned

Previously, the most likely wave number appeared to indicate that the correction was complete. The structure is a simple ABC correction (red), with the A:C wave having an exact 1:1 ratio.

In this case, the BTC correction ended on January 24. The number of partial waves is plotted in black.

BTC/USDT daily chart | Source: TradingView

The number of short-duration waves, however, negated this possibility. The reason for this is that sub-wave four moved into sub-wave one’s territory (red line).

This thus causes the upward movement to have a 3-wave structure instead of a 5-wave, invalidating this wave count.

BTC/USDT 2 hour chart | Source: TradingView

The triangle contains the 4th wave

Trader @XForceGlobal tweeted a chart of BTC indicating that the price is likely to complete a long-term symmetrical triangle.

Source: Twitter

Although unconfirmed, this possibility is still valid.

Currently, the length of the partial wave is as follows:

• Answer: 96 days
• B: 112 days
• C: 75 days
• D: 28 days (so far)

While the fact that sub-wave B is longer than sub-wave A is unusual, it’s fairly common for B to break past the top of wave A, like BTC’s move of late.

A potential target for the top of the current upside momentum would be $55,300, the 0.618 Fib retracement resistance as a measure of the previous decline.

BTC/USDT daily chart | Source: TradingView

A short-term increase of three waves does not stand in the way of this wave number, since partial wave D is most likely an ABC structure.

Therefore, on this possibility, BTC will retest the channel’s support line before starting a strong uptrend.

The $55,300 target (white) also coincides with the Fib extension of minor subwave A (black).

BTC/USDT 6 hour chart | Source: TradingView

Discount scenario

The number of bearish waves shows that the low of wave four has not yet been reached. The number of bearish waves would most likely indicate that the entire move down and subsequent rise were just a portion of waves one and two of the bearish momentum.

However, wave two failed to reach the 0.382 Fib retracement level in both time and magnitude. Therefore, this wave count is also invalid.

BTC/USDT daily chart | Source: TradingView

So, the number of only valid waves remaining suggests that the decline since the all-time high is a complex corrective structure (red).

In it, the BTC price is currently in wave C and is the latest decline.

The most likely target for the bottom of this move is $26,500, created by giving the A:C waves a 1:1 ratio.

After that, BTC is expected to rise.

BTC/USDT daily 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

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