Bitcoin Rises But Uncertainty Remains – Elliott Wave Analysis

Bitcoin (BTC) has rallied significantly since Jan. 24 but has yet to confirm it has bottomed.

Long term bullish momentum

The long-term chart shows that Bitcoin has been rising since December 2018. The wave count is most likely showing that it started a bullish impulse wave (white) on the day from the $3,122 low. This movement has led to the current all-time high. However, since April 2020, Bitcoin has corrected within the fourth wave.

This article analyzes several possible wave four formations to determine the correct number of waves.

BTC/USDT 3-day chart | Source: TradingView

Triangle

The first potential wave count shows that wave four is in the shape of a symmetrical triangle. In it, Bitcoin is currently in wave D (red). On this possibility, BTC will surge towards $51,000 – $55,250, a range created by the 0.5-0.618 Fib retracement resistance levels, before falling again.

From now on, the wave count is still valid.

BTC/USDT daily chart | Source: TradingView

However, its problem lies in short-term performance. The decline since February 10th (highlighted) looks like a bearish five-wave impulse (red). This puts the entire wave count in question as the drop should be more of a three wave move.

Although the structure may be an extended flat correction (yellow), the relationship between waves A and C is unusual.

BTC/USDT 3 hour chart | Source: TradingView

BTC is still correcting

Trader @24kcrypto tweeted a chart of Bitcoin and stated that the correction is ongoing.

Source: Twitter

This possibility suggests that Bitcoin is still stuck in a complex corrective structure.

The problem with this number is the time it took for the correction, which has been ongoing since April, so that the entire structure will take more than a year to complete.

BTC/USDT 2-day chart | Source: TradingView

Done tuned

Another likely wave count suggests that Bitcoin bottomed on Jan. 24. The ratio between the partial waves (black) fits perfectly as A:C is close to 1:0.618.

Additionally, all movement is contained within an ascending parallel channel that has been confirmed twice so far (green icon).

However, similar to the triangle scenario above, what is at stake here is the short-term downside, which has so far been a bearish five-wave impulse.

BTC/USDT daily chart | Source: TradingView

Short term volatility

As mentioned above, the short-term movement suggests that the decline since February 10th is a bearish five-wave impulse (red line). As such, one usually follows an ABC correction structure before dropping further.

The most likely level that will act as the top of the current uptrend is around $41,450. This is the 0.618 Fib retracement resistance and coincides with the previous parallel channel descending resistance line.

A jump above the February 10 high at $45,821 (red line) will invalidate this structure.

BTC/USDT 3 hour chart | Source: TradingView

Conclude

There are a few wave numbers that are still valid, but all have anomalies between the wave ratios. However, all wave counts indicate that a bottom is very close and likely to be reached in the next few months.

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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