Bitcoin (BTCUSD) Wave Count Toward 2024 Halving (Part 2)

Atualizado

This is the continuation of a long thread of updated that I started in June 2023, shortly after completion of wave 2 of the current market cycle that should take bitcoin way past the existing high of 2021.

The third wave is well in progress having perhaps reached half of its potential.

Nota

Here is a first attempt to assign Elliott waves to the rise from the bottom of the ascending channel of the last month.

At the top of the market are two highs that look like they form a new trend channel Drawn is a three-sigma regression channel that contains the trading, but it should be recognized that it is impulsive, with the second peak being clearly a five-wave structure.
Several degrees of third waves still need to be finished, which also leaves a series of forth waves for consolidation.

Nota

The scenario at the top of the market is playing out well according to the model drawn previously.

The 43000 mark Is under attack in the fifth wave of Elliott wave degree Micro, breaking above the trend channel from the previous two fourth waves and ending fifth waves.
So far it forms a perfect trend line at the top, but more extension is certainly possible.

Nota

This was a 5 minute bar chart, with a regression channel of two sigma, as well as the 2s channel for the last wave, micro 5, both now broken to the upside.

Nota

The bears are no competition up here, as the 43000 mark fell swiftly. With a new high of 43.3 k.
At some point this will exhaust itself, to end Micro 5 and Roman iii, at which point we should expect fourth wave consolidation in Roman iv with some retracement.

Roman numbering here means Subminuette wave degree, but this is certainly based on prior degree assignment in my chart, and might need upgrading at some point, if we need to be more granular along the way.

Nota

44000, only minutes later.

Nota

I think this fifth wave is not finished yet, even at 44011. The oscillations are too small to correct the third wave in Roman iv. But something larger and deeper can certainly develop.

Nota

Indeed a few points got added at the top. Counting waves in smaller degrees along today’s breakout confirms that this advance is still not finished. Wave Roman iii still has room to grown.

Indicated in this 5-minute chart are Submicro and Miniscule degrees.

Nota

At the top of the market, bitcoin may have finally found its bottom in Roman iv, as previously discussed. A new impulse wave to finish this series in wave v, lower case Roman, may be in the making.

Overall this currently looks like this on the hour scale.

Nota

This leaves four more third waves of higher degree to be completed to reach a new ATH, beyond 69000.

Nota

Overnight, the Roman wave iv correction has expanded a little further and deeper, forming an ABC-flat. This is good for the structure of the entire five-wave sequence. Corrections should be getting larger and last longer as the minor wave degrees are closed out on the way up the price scale. I would not mind if this continued a little longer, and indeed it cannot be excluded yet.
Only thing that is certain is that wave v will begin at some point to advance the bitcoin spot market a step higher. A reasonable expecting might be to add a thousand points or to the range of 45.5 to 46.0 thousand dollars.

Nota

The correction in wave Roman iv has indeed expanded from an ABC-flat into a full 5-wave triangle correction (ABCDE), with a top trend line that is perfectly horizontal. This is called a barrier triangle, and even traditional analysts recognize this as bullish signal. The market usually breaks through the horizontal side.
In Elliott wave theory it obvious that the ensuing fifth wave will break to the upside in bull market.

At this point, this can be used as a trading signal for new long positions.

Nota

This now, finally, forms a beautiful Elliott wave with proper dimensions.
The first wave is set as 1.000 standard. It can be seen that the significant events in wave iii fall on Fibonacci levels or into zones. The third wave has an extension of close to 3.618 wave I height. It contains two smaller degree waves.
Such an extended wave will likely run only a short fifth wave, perhaps the size of wave i, if not even shorter.

Nota

Nothing since my last marking of wave e of Roman iv looks bullish yet. Wave e may not be finished. The market has a lot of patience with corrections, and three-wave structures can be chained ad nauseam.

Nota

The hunch was spot-on. The correction was not finished. It proceeded longer and deeper, as shown in the following chart. It took the final form of a three-wave flat.
Since, the market has broken the trend line of the down turn, and is breaking out of a regression channel in Micro wave 3 circled, which is a sub wave of Roman v.

I expect Roman v to advance no higher than around the 45000 mark, based on reasonable expectations for Micro 3/4/5. The line represents a consensus from proximity of Fibonacci levels measure with waves one of the Roman sequence, as well as from Micro 1. This takes the market only slightly beyond the existing year high of about 44.5 k. But I hinted at that previously, based on the fact of the extensions in wave Roman iii (subminuette).

The chart also shows my expectations of short term completion (next few days) of Minuette wave Roman iii parenthesized.

Prices higher than 45 k before another period of correction would be welcomed surprise.

Nota

Action has been swift again, with a year high printed. The market advanced already to the 1.414 Fib extension for the fifth wave, just a few dollars short, which I had indicated on the chart as a possible resistance. This should pick up a few more dollars to complete the subwave, which is in wave 4 correction as I am writing.
No surprises so far. We shall see what the remainder of this wave accomplishes. 45000 still looks good as a target, just 200 points to pick up above current high.

Nota

Updated chart:

Nota

The market has been taking its leisure in completing these waves. This shows the increasing don pressure from shortsellers who think this market is topping out.
The fourth wave correction in Micro wave circle 3 went deep, to the top of wave one, but without overlap.
In addition, it stopped at a newly formed supporting trend line, which I published in another new topic. This trend line is the support for a new trading channel for the next week or two.
This trend channel is also in confluence with the established Fibonacci level extension of the existing waves.
The 45000 mark still appears as an approximate target for today, to complete Micro circle 3.

Nota

This is the presentation of the new trading channel, which should enable this market to grind through the resistance zone ahead of 48000 in the next week or two.

Bitcoin (BTCUSD) trading channel in December 2023

Nota

Well, with the breakdown of the bottom trend line of this new channel last night my recent wave counts got obliterated, in that the depth of the fourth wave (4) would exceed the first wave (1) top. The whole structure appeared more corrective than motive anyhow, in retrospect. I don’t see anything bullish since my marked end of Roman iv. This may indeed need to be moved somehow.
Stay tuned…

Nota

Clearly the idea of this or a similar trading channel at the top of the market has been destroyed by the dump last night. But when comparing the chart with current data, we see a striking resemblance to what I perceived as the future correction in wave (iv), parenthesized Roman four. This is a larger degree wave sequence that should indeed have a correction in wave four of the size the market has just thrown at us. This appears very healthy.

Nota

Here is the picture that emerges from the rubble the bears left this week.
They did a nice job of clearing.the congestion and providing clearance for the shot into the 50k realm.

The situation is that all smaller wave degrees than our Minuette degree (paranthesis Roman numerals, blue in chart) have finished their five-wave progressions and corrections. Wave (v) is now in progress to finish somewhere above the existing high, but probably close to 44.5 k, which is the 162% extension of wave (I). We can’t really expect too much more given the structure of the market, with the 45-48k resistance zone overhead, and waning momentum of a fifth wave.
For the push through the resistance zone, we need to wait for green wave circle v, ((v)) to commence, which has much more potential in the higher degree, possibly about ten thousand points.

The identification of the now closed waves was possible by almost perfect Fibonacci ratios and the touch down of the short selling this week almost onto the extension trend line from the beginnings of waves (I) and (iii), the red dotted line.

Nota

In this chart I drew a simple ABC for fourth wave correction. It is also possible that we stay close to the bottom to complete a triangle correction. The wave counts down there post dump are still ambiguous.

Nota

This chart has a problem in that the green wave circle iii is too short if it ends as shown. The third wave cannot be the shortest of one, three, and five, if I assume the fifth wave will have a size like the first. So, this still needs work somewhere, as always.

Nota

Well, having regained the 43000 level, bitcoin is proceeding exactly along my lines. But the more interesting part is its behavior when this wave runs out. It has to correct in a fourth wave and complete the run in wave five. That should take it where we left off Sunday, short of 45k. At that point the market needs to correct again for a thousand points or two.

Nota

But it is entirely possible that this wave extends way past the 162 % extension, perhaps 2.618 even. There is certainly built-up energy now from the drop.

Nota

Here is my analysis of the market as it it has been progressing since the crash at the start of the week

The market is current bound into a zone supported by a trend line that has been strong support of the bull run since October. Bears should face it, it is unlikely to be broken now, with the trading bias to the upside. The crash couldn’t break it, and there is probably little left in open interest with stops in the area below the trend line. On the top the trading range is contained by a trend line (dashed red line) that represents the trend before the crash.
The correction from the crash and the consolidation of unfinished recovery waves since has been complex, as shown in my new chart.
The market currently bouncing in what appears as a triangle correction in fourth wave.

Nota

I covered the development of the “crash” of December 2023 in a separate posting, which has now concluded.

Of course a “crash” it was NOT. It was a normal correction after a remarkable run in October and November. And as such it was relatively shallow and proceeded most sideways with a c. 3000 point mostly horizontal band.
Technically, per Elliott Wave Theory, it was a fourth wave triangle, as such having a, b, c, d, and e subwaves of three-wave structure each. This has clearly unfolded, although it was not an easy task to predict the resulting shape as the market turned down and upwards in rapid sequences. In particular waves b and d showed strong rallies that confused the casual as well as uninformed traders. Waves b and d can be vicious in their force by fooling the traders into bullish behavior, only to be negated shortly after.
The outcome after wave d however was mild, as wave e only descended half way into the channel. Quickly, over night, the bulls arrived to lift the market beyond the trading range toward a path to what should be a new year-high shortly.

Nota

Let’s look at the exit from this correction in more detail to find its potential for the remainder of the week.

Out of the starting block at the end of triangle wave e, the market has developed a large wave one advance and wave two correction, shown in a yellow line trace.

Wave one is composed of a 1-2-3-4-5 sequence, shown in green lines, that was dominated by its long fifth wave, extending more than 200% of its first wave and exceeding the 44000 mark. This fifth wave is neatly subdivided into another five-wave sequence of one lower degree with a long extended third subwave that yielded a total size of almost exactly 268% of its first subwave.

What can we expect now, for yellow wave three? Based on Elliott Wave guidelines and Fibonacci extensions, it should at least challenge the 48000 mark, if not bring 50k prices into play.

The correction in wave two may not have played out to completion, so exact number depend on the confirmation of the start of the third wave.

Nota

Correction: I should have written that the entire wave sequence of wave five extended almost exactly 500% of its first subwave, not 268.

Nota

This long 500% wave beautifully illustrates Elliott wave theory. It is extended, starting with two 1-2 sequences, a long third wave, finishing with two 3-4 sequences, and a fifth wave about the size of wave one. In the chart, it is highlighted in blue lines. Classical Elliott, as much as this entire bull run has shown.

Nota

Now the construction of the entire set of waves at the top of the market becomes clearer.
The Elliott Wave Principle works like clock work.

The yellow waves one and two that I proposed to take the market higher do not exist. Instead, the first wave from the exit wave e of the prior correction (lower left hand corner) to the top of the market, that was marked as yellow wave one in my previous chart, is in fact a fifth wave from a remaining unfinished wave sequence that started at the bottom of the run from the 30k area. I had been searching for it, and began believing in a mistake in counting, this now come to a logical finish. Over the last day the market continue to correct in yet another triangle pattern, which is shown in the following chart. This corrects that fifth wave and the third wave of one higher degree (in purple).

The purple fifth wave will take this market to the next level of elevation. The market is already breaking out of this triangle.

Nota

There are no more unfinished wave sequences of lower degree than the purple line which I should have ended as wave 4 under wave e of this triangle.

Nota

In the hourly view this looks as follows:

Nota

There is no way to tell right now whether today’s triangle is in fact the end of the correction. These corrections can grow easily, as we have seen before. Furthermore the size of this correction appears too small to correct the large purple wave, so we should look out for more of the same: corrective structures.

Nota

The continuing correction-like trading creates new opportunities to resolve the wave assignments at the top of this market. I am also still looking for a larger and possibly deeper correction for purple wave four. Who is in a hurry?

Nota

I suspect the top is going to be pushed a little higher again so that this can play out better before purple wave five commences.

Nota

We see that these corrective patterns appear to continue causing essentially sideways trading underneath a clear resistance line or zone just ahead of 45000.

Underneath the trading appears dominant the trend line of the entire recent advance from the 30k range, and while indeed breaking below this line occationally the market also appears to be crawling up on this line.

Eventually this will cause a collision of resistance and support lines, but it remains unclear for the short term whether this will result in a break up or down.

Nota

The escape from the stalemate horizontal trading came on Christmas Eve in a sharp drop of about 1000 points.
To me this has brought some needed clarification of just what the market has been doing all this time pretty much at the top of the year’s chart. This allowed me to clear up my mess of lines and labels.
But it also gives me confidence that the bull market is likely to continue. Elliott Waves don’t lie about the mood of the trading community. Yes, the market may seem exhausted, as is reflected in some posts on TradingView. But exhausted has been only the third wave of the second most major wave sequence, the progression just below the large black wave 3 that I drew in the topic header in this thread. The market also seems to have completed wave four. Wave five will fill the rest of the length of major black wave 3. I think the wave is only about half filled so far, and could reach a new ATH.

Nota

This can be seen in this weekly bar chart with only the relevant waves visible.

The sequence of the major three wave degrees is black, purple, and green. The green five-wave sequence completes wave three of purple degree.

Only waves one, two, three, and four of purple are completed. Wave five has just started. Once completed the purple wave will complete the black wave three.

Nota

In yet larger view this brings us back to the chart at the top of this topic.

Nota

I don’t know how much another week of the year can change this picture, but this is in essence the state of bitcoin at the end of 2023.

Nota

In another post I have attempted anew to decipher the structure of the bitcoin market top. It corrects and updates some of assignments here.

It also suggests the continuation of the bull market in purple wave five, as explained here yesterday.

Nota

Depicted here is the first wave ((I)) and second wave ((ii)) in green at the start of the larger degree wave five (purple).

Specifically it analyses the structure of wave two, which is critical in understand this mess of waves recently, that has left many traders doubting the strength of this bull market.

Nota

I think I should connect this development with the previous corrective structure of the year’s high, which also needed a slight revision from my earlier assignments.

So, we can divide the horizontal trading into two parts:
A) correction of purple wave three which produced the years rally into the 40k range. This resulted in completion of purple wave four.at c. 40500.
B) production of first wave one and two (green) of purple wave five.

Nota

January 1, 2024

45.5 k

Nota

The days before this chart are a lot harder to assign, in terms of Elliott waves.

One possibility is the assumption of a leading diagonal, 1-2-3-4-5, in which the Jan 1 rally is the fifth wave.

Leading diagonals are often retraced very deeply, so whatch out for loosing this advance almost entirely.

Nota

Another possibility is that these two leading waves are simply two 1-2 sequences. That would make the following third wave extended, which could go way up the price scale. But we won’t have any clue until it is all done. In that case the fifth wave at the top will be relatively short.

Nota

Quote: “ Leading diagonals are often retraced very deeply, so watch out for loosing this advance almost entirely.”

So, let’s strike the word “almost”. The retrace was complete. And you heard it here.

This once again shows that market news does not change markets. News creates only noise, and noise we got. Read the Prechter books, which have been hammering this point for decades.

Nota

You can just forget the news, don’t bother following it every tick, and focus on the price action. The people that produce the news just try so hard to explain every turn of the market with the current on-goings somewhere. Their bosses demand explanations, and they get them of course.
So forget ETF stuff. The leading diagonal was in the works before the rumors started. The size of the fifth wave may have been affected, but that’s just noise. It had to come back down.

Nota

The market has developed a very discerning pattern for the start of the new year.
There is now a pattern that looks like an expanding diagonal. This could be an ending diagonal or a leading diagonal, and I don’t know which.

As an ending diagonal, drawn here as the fifth and terminating wave of the up trend, it would likely cause a drastic fall in price.
But it could also be a leading kind, to start the next wave up. In either case the action could be energetic, as momentum has been building between the diverging trend lines, as was shown just in the last two days with almost 10% market swings.

Nota

With the complexity of wave structure at this top, we also have to look for additional interpretations, as I have endeavored for weeks. The picture keeps changing.

Nota

Per discussion in the comment section below, here is my current wave assignment for the last few months.

Nota

The following chart provides a new assignment per the discussion in the comment section.

This shows that the bulk of action at the top of the market was an ending diagonal wave Minute 5 of Minor 3. An ending diagonal is a motive wave, but not an impulse. The wave did produce a new market high on January 1 (hence motive), but it has a lot compression in it, due to the overhead resistance zone. Waves 1, 3, and 5 overlap, which is not permitted in impulses.

As a consequence, Minor wave 4 has just started, and appears in progress. It has the potential to dip down to the 38% Fib level retracement mark.

The very near future, days or less, will show what the truth of the market is.
If the market sells off in in case of a rejection of the ETF applications, the media everywhere will link the two together. But here we know that it has not much to do with that. The market has it in its structure already.

Nota

But in case of acceptance of the ETF applications, they will say, buy the rumor…sell the news.

But we have to wait and see how deep this wave 4 correction actually drops, if at all.

Nota

This last wave assignment is almost perfect. I now can reinsert one more wave in Subminuette degree into Minuette 3 that resulted in the 2023 market top.
I had originally marked it, but then combined two 1-2 sequences into a single one, because the corresponding waves 4 and 5 would not show up at the top. Now there is room for it. I will update again.
I have long learned that the market does not miss a beat when it comes to matching corrections in fourth waves to their 1-2 bases. I have seen cases of a dozen or so 1-2 sequences perfectly matched with 4-5 ends. How the market does this is a miracle and perhaps mystery, just like the number of seeds in a sunflower blossom being a Fibonacci number.
This accuracy of this wave count lends it high credibility, IMHO.

Nota

Basically I am waiting now for the correction from this years high to play out, possibly with a plunge of some magnitude. But given the strong support below 41000 or so, this may not materialize, just like the bears have been defending gains to the upside.

Nota

There is a guidance in the practice of EWT for the depth of corrections that states that a fifth wave is corrected most commonly to the depth of the fourth wave of one lower degree. By that argument we could expect a very shallow correction now, since the preceding fourth wave is very shallow too.

Nota

The deep correction still has not materialized after a week of oscillations from the minor drop from the market high of January 1.

Bulls are defending a rising slope into the 61.8 % retracement level of that drop, while the bears have put up a large sell wall at this level. The result is clear and shown in the chart.
Something has to break in the next few hours of this Sunday.

The wave count here is too messy to post…and who knows what it really is.

Nota

Well, let’s try ourselves at an assignment of wave count.

This is for the bullish case in which we do not expect a deeper correction which I had shown earlier.

The extremely low volatility over the weekend with a standoff at essentially the 0.618 Fib line was expanded just a little over night with swing to down side and now upside, involving the 0.5 as well as the 0.382 Fib levels. This was reverted swiftly with a leg up to the 0.786 level this morning, now trading in the zone between last year’s high of December and the new year’s high. This created a new parallel channel that is ascending over all, and might have bullish implications.

This might justify the following wave count:

Nota

Looking at the large picture, the initial sharp correction at the far left side of this chart would constitute the end of wave Minor 4, terminating in that wave ((c)) at 41.4 k at the lower left corner.

Although a wave four is typically expected to retrace wave three by 38 %, I can except this end with the observation that overall this Minor wave has a well formed shape—this is an important aspect of Elliott Wave Theory, c.f. Frost & Prechter—and that it is still constrained by the trading channel established on November 1, in which trading now rides the bottom trend line. You can see this trend line as the green line in the lower portion of the chart crossing the 0.236 Fibonacci level.

Nota

Considering the short-term bearish thought, this ascending weekend channel may well simply be a counter trend move before another drop in which the first drop into. ((c)) was the initial abc leg of a flat correction (3-3-3).

A decision by the SEC about the fait of the bitcoin ETF applications could well trigger a move in either direction. It seems they are planning for first trading on January 11❣️

Nota

In case of this longer correction in a flat 3-3-3, I would expect the current upside trading to extend to just under the new year’s high, and then reverse quickly. The market is getting pretty close to the top.

Nota

But clearly that’s not what the market has in mind:
46100+
New 52-week high.
That was easy.

Nota

Perhaps the market knows something that has not been reported yet in public.

46600

Nota

47000

Nota

Based on the structure so far, this wave has the potential to reach almost 49000 today, which marks the 1.618 multiple of wave one. It has paused at the 1.00 level for a bit currently, which also marks the 1.618 size overall, meaning waves 1: 2, and 3, so far.

Nota

In another thread I have discussed further the current assault on the 49000 level.

Nota

January 19, 2024
Shortly after the last update here, the market expanded one more time in this run to the 49000 mark. It was a volatile week for the market, with a rapid sell off from that new 52-week high. And that is it, for this run.
There is a lot of speculation about the why and how, and the relation of all this noise to the approval of a group of spot bitcoin exchange traded products.
It is surely a curious situation that the ETP/ETF approvals coincided with the market top and a sell-off shortly after. But that had very little or nothing to do with it. The ETP stuff was just noise on the market. Noise and news don’t make the market. Some keen observers on TradingView have correctly expressed a weakening of the bitcoin market. Every run comes to an end. The Elliott Wave Principle tells the story better than any tool out there.

Elliott Wave theory is not easy to use. For the most part, I find that people don’t spend enough research time for understanding the nuances, or even the basics.
But it is not easy to correctly label waves in a market. Multiple assignments may be valid any time, and this is often predicated on the bias of the analyst. For crying out loud there are still people who think of this market as a bear market.

A carefully examination of every wave and trough of last years market tells a compelling story. It tells me that the market from September 2023 to January 11 comprises a whole, coherent, consistent, and closed Elliott wave. It should be labelled as the first wave of five of a bull market that should extend through 2024.
Its foundation was the structure created in the first phase from November 2022 to the end of summer of 2023, a 1-2 wave sequence in Intermediate degree. Since then, September, Intermediate degree wave three has been operational, of which wave one in Minor degree is now complete.

Minor wave one has been limited in size by existing structural resistances of market. Just dollars on top of the current market high at 49000 USD, is the 0.618 Fibonacci level of the retrace of the bear market of 2022, which coincides with an apex of the major inflection point in 2022.
The market spent most of December in a narrow range below this level closing ongoing third waves, correcting them, and finishing their fifth waves. This was a very complex affair, and caused a lot of confusion among traders and analysts. I have not seen a meaningful analysis until now, in my own work. And I was confused too, to be honest, until the last two 52-week highs occurred as sharp spikes.
Since 1/11 the market has been selling off almost ten thousand points from peak to low, so far. This is wave two. The Elliott Wave Principle gives guidance to the depth of second waves. They can be very destructive, retracing the market often by 61.8%. But as a first guidance, it should retrace to the extend of the fourth wave of one lower degree. As of today, this criterion has been met. Whether the retrace drops below that, remains to be seen.

Nota

The following chart shows the new structure of the market from September to January.

Yes, it is cluttered. It is complex.

This uses the data from the Bitcoin Index, so exact prices are slightly different.

Nota

I should comment on the wave degrees in my labelling.

It is difficult to decide on absolute wave degrees, and analysts don’t often agree on such matters.

The largest degree seen in my chart is the dark red wave 1, of degree Minor.
Inside Minor 1, are two waves of essentially the same size in degree Minute. I labelled them both with the same number style, but with different colors, purple and green. Technically of course, the inside-wave is of lower degree. They start with 1-2 1-2 labelling. This indicates that the following wave three is extended, essentially two wave threes in one run. This makes extended waves very powerful and they typically are very long, with multiple times the size of the first waves, often 3 or 4 times wave 1., or even longer. A standard wave three may extend to only 1.618 times the size of wave one. This is confirmed here. The down-side then is that their fifth waves are very short, barely reaching above the end of the third wave tops. This is also confirmed in this bitcoin market: The crowding of third, fourth, and fifth waves at the top, just under the major resistance level.
Amazing❣️ So this means that the market knew already at its beginning of the run what the structure at the top would be, and where this was to occur, namely at the 0.618 level of the preceding bear market. The size of this wave was preplanned by the forces of the market. Amazing.

This also means that the ETF decisions and the hype and chatter before-hand had nothing to do with the dynamics of the market. It was all cooked in somehow.
This is a principal thesis of modern market theory. News has no effect on market direction. News is just noise, and makes only noise in the market pricing. Looking at the chart no one can tell when the SEC decision was made. There was no buy-the-news sell-set-fact syndrome. It’s all nonsense, and the timing was rather coincidental. But news writers need to correlate the market with obvious events of the day, because they need to look smart, or else they won’t have a job for long.

Nota

I find the bitcoin market rather robust in this wave 2 pull back. The 40000 line has been solid so far. This is the time to buy for the next few months. But this is not financial advice, just a citation of reality. By Spring prices will have doubled, or close there. The S2F value is already spiking and a rough guide is that the price of bitcoin is about its S2F value at the time of halving. Spring is only nine weeks or so away.

Nota

Looking at the larger picture, the bitcoin chart now looks as follows.

The superstructure in the higher degrees has not changed. The market is still executing in five waves of intermediate degree from the low of the 2022 bear market, with waves (1) and (2) completed. This is the large black wave, similar to the original chart at the beginning of this post, and the first edition post of this topic.

What has changed is that we now have more information about the structure of wave (3). This structure is the dark red wave of this new chart, dividing wave (3) into another five-wave subwave of minor degree.

The four-months rally from September 11, 2023 to January 11, 2024 can now be recognized as wave one of Intermediate wave 3. This wave one is a wholly self contained, closed wave. It is consistent internally, comprising a Minute degree extended wave, meaning the it starts with two 1-2 waves of about equal size. Because of this feature, the extended third wave dominates the wave structure with its extra-long run typically at least a 2.618-multiple of wave one, but in practice often much longer. Here it ran for a six-fold multiple! The draw-back of extended waves is that their fifth waves are short, perhaps even less than a 1-times multiple. Given the long run of three here, the second and final fifth wave had a size of about 2x.

We are now waiting for completion of wave Minor 2 (dark red). Judging the end of corrections is always difficult in the bitcoin market, if not everywhere. The retrace from 49000 to almost 40000 may be sufficient already, given the strong support by the psychological 40k barrier. Indeed the market appears to be biased to the upside again, and I can count a completed wave structure. The market has formed a spinning too pattern from its last push downward, which is thought to be a bullish scenario in traditional pattern analysis. But we have to realize that the traditional pattern are poor indicators and can’t be taken self-standing without backup. Often they are just fragments of Elliott wave structures, and those can be hard to recognize correctly with a wholistic analysis of several wave degrees.

Nota

Correction: … those can be hard to recognize correctly WITHOUT a wholistic analysis of several wave degrees.

Nota

Spinning top pattern, not too pattern.

Nota

The estimates for the size of wave Minor 3, and of wave Intermediate (3) are drawn assuming standard extension rules for Elliott waves, based on the actually observed sizes of wave one of each impulse degree. The shown picture is actually the minimum in price I expect, that means a minimum of 160k for the red wave sequence, or black wave three. This could easily happen by mid-year. Previously, I had expected 77000 before the halving. This may still be in line with this new structure forecast. Certainly, past rallies of bitcoin have performed just as rapidly, albeit at lower price levels.

Nota

Another, so far unmentioned aspect is the possibility of an extended wave three forming at the Intermediate degree, just like we saw in wave three Minor, explained earlier.
There is a good chance that the wave Intermediate (2) is actually a double 1-2 sequence, rather than a single A-B-C. I indicated this opportunity by highlighting an extra wave (1) inside (2, but in blue color. An extended wave three could easily run to a million dollars, something I can’t get myself to propose just yet.

Nota

It seems we have a perfectly complete W-X-Y for wave 2. With an ending diagonal in the final C position.

Nota

It appears that wave 2 concluded with a pull back to about 38.5 k points, limited by strong support in the indicated area of congestion in wave one.
It was further limited by support from the middle trend line of the ascending trading channel of the 2023 bull run.

In detail, it appears that a bullish wave sequence has emerged that is current target working in the 42 to 43 thousand range.

Nota

In a separate posting, I published more details of this new rally.

BTCUSD: The start of the 2024 bitcoin bull market

unbeldi

Aviso legal

As informações e publicações não devem ser e não constituem conselhos ou recomendações financeiras, de investimento, de negociação ou de qualquer outro tipo, fornecidas ou endossadas pela TradingView. Leia mais em Termos de uso.