close icon

Ahead of Facebook’s Crypto-Ban and Bitcoin’s Plunge

The hottest investment of 2017 has been the worst one in 2018 so far. Bitcoin, still the largest cryptocurrency by market cap out there, is down by over 50% from its $19 666 all-time high in December, after losing more than 30% in January alone. February starts in a similar fashion – with a 750-dollar decline to as low as $9350 as of this writing. The bulls simply cannot catch a break and now even Facebook is against them as the biggest social media said it will no longer tolerate crypto-related ads on its network.

The good news is that with the help of the Elliott Wave Principle the current selloff could have been anticipated. On January 28th, while BTCUSD was hovering around $11 750, a textbook Elliott Wave pattern suggested a bearish reversal should be expected. Take a look at it on the chart below, sent to clients last Sunday.
bitcoin elliott wave analysis jan 28
The pattern that warned us about the current plunge in the price of Bitcoin consists of two parts. The first is a five-wave impulse to the south between $13 052 and $9927, marked as wave “a”. The second is the three-wave recovery in wave “b” up to $11 989, which completed the entire 5-3 wave cycle. According to the theory, as long as BTCUSD was trading below $13 052 – the starting point of the impulsive sequence – the bears were still in charge. Apparently, it was not a good time nor price to join the bulls. Four days later, the updated price chart of Bitcoin below shows how the situation developed.
bitcoin elliott wave analysis feb 1
The invalidation level at $13 052 was never threatened. BTCUSD started falling right away and lost another $2400 very quickly. Bitcoin enthusiasts argue that Facebook’s ban on crypto-related ads is the main reason for the plunge. It makes sense, but think about this: Facebook announced its ban two days ago – one January 30th. The bearish pattern was complete on January 28th, two days before that announcement. As Ralph Nelson Elliott once said, “news is the tardy recognition of forces that have already been at work for some time and is startling only to those unaware of the trend.” So do not blame it on Facebook.



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Ethereum ‘s Collapse Carries an Elliott Wave Message

Ethereum, still the second largest cryptocurrency with a market cap of ~$39B, was enjoying a strong 2020. ETHUSD was up 282% YTD until the start of September. The last few days, however, seem to have brought the bulls’ winning streak to its end. The price of Ethereum collapsed from as high as $489 to less…

Read More »

Bitcoin Is Up 35% Since Christmas. Here is Why

The price of Bitcoin was hovering around $7200 on Christmas, down from $13 880 six months earlier. And while the majority of headlines were all doom and gloom, the cryptocurrency‘s price charts were telling a very different story. Bitcoin was down 48% from its recent top, but that wasn’t the time to join the bears.…

Read More »

Bitcoin ‘s 40% Surge didn’t Come Out of Nowhere

On Thursday, we showed you how Elliott Wave analysis set the stage for a Bitcoin plunge to under $7700 ten days before Mark Zuckerberg’s Libra testimony. The cryptocurrency was barely holding above $7400 at the time of writing and many thought it was prone to decline even further. Since Bitcoin is among our premium instruments,…

Read More »

BTCUSD: Libra Testimony Didn’t Cause the Fall

Facebook’s Mark Zuckerberg testified before Congress on October 23rd about the company’s Libra cryptocurrency project. The hearing didn’t go as smooth as the crypto community hoped, which reflected on the price of digital assets such as Bitcoin. At one point on Wednesday, BTCUSD was down by over $750 for the day. But was Zuckerberg’s Libra…

Read More »

The Bears Rule Over Ethereum Under $225

We last wrote about Ethereum on August 9th. The second largest cryptocurrency had plunged by 42% in less than two months and was hovering around $210. Unfortunately, our Elliott Wave analysis of the decline from $363 pointed to more weakness ahead. See the chart below to refresh your memory. This chart was included in our…

Read More »

Staying Two Weeks Ahead of Bitcoin ‘s Crash to $8000

The price of Bitcoin has been slowly losing ground since late-June when it touched $13 880. The bulls have been relying on the support near $9000 for over two months. They no longer have that luxury. BTCUSD was still gravitating around $10 000 on September 23rd. The next day, it plunged to $7998. While the…

Read More »

Bitcoin Fulfills Yesterday’s Bearish Elliott Wave Setup

The price of Bitcoin plunged sharply on Wednesday and keeps falling early Thursday. BTCUSD reached an intraday high of $10 280, before crashing to as low as $9555 yesterday. Today, the bears are still in charge and managed to drag the price to $9320 so far. To sum it up, Bitcoin lost almost $1000 per…

Read More »

More analyses