Advertisement
Singapore markets closed
  • Straits Times Index

    3,447.56
    -23.60 (-0.68%)
     
  • Nikkei

    40,063.79
    -62.56 (-0.16%)
     
  • Hang Seng

    17,417.68
    -360.73 (-2.03%)
     
  • FTSE 100

    8,155.72
    -49.17 (-0.60%)
     
  • Bitcoin USD

    67,038.16
    +381.54 (+0.57%)
     
  • CMC Crypto 200

    1,381.32
    +50.43 (+3.79%)
     
  • S&P 500

    5,505.00
    -39.59 (-0.71%)
     
  • Dow

    40,287.53
    -377.49 (-0.93%)
     
  • Nasdaq

    17,726.94
    -144.28 (-0.81%)
     
  • Gold

    2,402.80
    -53.60 (-2.18%)
     
  • Crude Oil

    80.25
    -2.57 (-3.10%)
     
  • 10-Yr Bond

    4.2390
    +0.0500 (+1.19%)
     
  • FTSE Bursa Malaysia

    1,636.55
    +2.74 (+0.17%)
     
  • Jakarta Composite Index

    7,294.50
    -26.58 (-0.36%)
     
  • PSE Index

    6,791.69
    +86.68 (+1.29%)
     

Is the “expect a Big Rally” in Bitcoin Here?

Three weeks ago, see here, I concluded, “[Bitocin] BTC is now getting close to the upper end of my ideal $28-36K target zone, and the weekly chart setup has all the ingredients in place to allow for a multi-week counter-trend rally to ideally $57-60K before the subsequent c-wave decline starts. However, the devil is in the detail. I am keeping my premium crypto trading members abreast if we may only see a shorter-term bounce to about $47K+/-2K before a final drop to around $32+/-2K from where this more significant b-wave can then start.”

Fast forward, and BTC failed to even rally over the short term and dropped to as low as $32990 last week. Typical for a bear market as often the “upside disappoints and downside surprises in such an environment.” Thus the cryptocurrency reached the “$32+/-2K” target zone and rallied strongly today as it trades at $40K. That’s a 22% gain and worthy of an update.

Figure 1. Bitcoin weekly chart with detailed EWP count and technical indicators.

Wave-b (B is for Bounce) should now be underway.

We certainly had to be a bit more patient before BTC would find a meaningful bottom, but the weekly chart in Figure 1 shows BTC is staging a 2nd up week in a row. Since the decline started from its November 2020 all-time high (ATH), a feature that has not happened, yes, it has been that long.

ADVERTISEMENT

Unfortunately, the cryptocurrency is still below its 10-week, 20-week, and 50-week Simple Moving Averages (SMAs), but it still holding the Ichimoku Cloud (the Cloud) as support, while the technical indicators (RSI5, upper panel; and FSTO, lower panel) are moving up from oversold. Note the FullStochastic Oscillator has reached such low levels from which historically multi-week rallies/bounces occur: vertical lines in Figure 1. Thus, all ingredients are available to set up a multi-week counter-trend rally.

However, it is still unknown if the current decline from the ATH will consist of three or five waves at this stage. If the former, then we should see the more extensive (black) major-b wave reach $60+/-2.5K. If the latter, all we should expect is a short-term bounce (a minor 4th wave) first to about $45K+/-2K before the last drop to around $30+/-2K (a little 5th wave). From there, the b-wave can then start. I keep my premium crypto trading members updated on each option in great detail to ensure they are as well-prepared as possible for either option. For now, my preferred Elliott Wave Principle option is that of the more significant b-wave bounce.

Regardless, once the more significant (black) major wave-b completes, see figure-1, we must expect a considerable wave-c lower because every correction always comprises three waves: a, b, and c. I anticipate this c-wave to reach ~$28K to complete primary wave-IV (blue). But that is looking around too many corners at once. So, let’s first focus on the “b-wave” vs. “smaller 4th and 5th wave” setups, with the former option preferably.

Bottom line: Bitcoin’s trend was already correctly identified as bearish in December, see here, and the cryptocurrency continued its slide until last week when it bottomed at $32990. It is now staging one of its best rallies since the November 2020 ATH, suggesting a trend change is materializing. Thus, now more than ever, the weekly chart setup has all the ingredients in place to allow for a multi-week counter-trend rally to ideally $60+/-2.5K before the subsequent c-wave decline starts.

However, I am keeping my premium crypto trading members abreast if we may only see a shorter-term bounce to about $45K+/-2K before a final drop to around $30+/-2K from where this more significant b-wave can then start. For now, my preferred Elliott Wave Principle option is that of the more significant b-wave bounce: B is for Bounce.

This article was originally posted on FX Empire

More From FXEMPIRE: