close icon

Bitcoin Bears Needed a Catalyst. Tesla Obliged

What will BTCUSD bring next week? That is the subject of discussion in our next premium analysis due out late Sunday!

Tesla CEO Elon Musk announced the company would stop accepting Bitcoin as payment due to environmental concerns. The EV-maker’s Bitcoin stunt lasted for just three months, apparently the time it took for its CEO to realize how inefficient and energy-consuming BTC mining is, something we wrote about in March.

The price of Bitcoin, of course, plunged sharply to as low as $45 700 earlier today, down 21% from yesterday’s high. But in our opinion, the stage was set for a decline long before Tesla officially abandoned Bitcoin. In other words, the announcement came just in time to trigger the bearish Elliott Wave setup shown below.

Bitcoin Bearish Elliott Wave Setup Await a Catalyst

The chart above was sent to our clients as a short-term update early Wednesday, May 12th. It revealed that the decline from $64 895 was a five-wave impulse labeled i-ii-iii-iv-v. The following recovery looked like a simple a-b-c zigzag correction, where wave ‘c’ was an ending diagonal. Also note that the price tried to breach the 61.8% Fibonacci resistance level, but failed every time.

Bitcoin Drops 21% as Bearish Elliott Wave Setup Bears Fruit

Taken together, the impulsive decline and corrective recovery formed a complete 5-3 Elliott Wave cycle. According to the theory, the price was supposed to head in the direction of the impulsive sequence. Since wave ‘c’ appeared to have ended, we thought “holding a short position above $59 603 is not worth the risk.” Then, Mr. Musk spoke.

Tesla drops Bitcoin as payment option, price falls

Several hours after our subscribers received their premium updates, Tesla decided to no longer accept Bitcoin as payment, sending the price sharply lower. BTCUSD breached the low of wave ‘v’ of the previous impulse, thus reaching its initial bearish target. $59 603 was never threatened.

While no-one knows what would have happened otherwise, we think BTCUSD was supposed to fall anyway. The Elliott Wave structure was pointing south. The bears only needed a catalyst and it could have come from anywhere. In September 2018, it came from Goldman Sachs. Now, it came from Tesla. We have no idea where the next catalyst is going to come from. We do plan, however, to keep relying on the Elliott Wave structure to put us ahead of it.

What will BTCUSD bring next week? That is the subject of discussion in our next premium analysis due out late Sunday!

Stay informed with our newsletter

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

Privacy policy
You may also like:

Should You Buy Solana? What the Charts Say

Solana just cracked the top ten biggest cryptocurrencies with a market cap of just under $21 billion. The rumored Ethereum rival is up 235% in the past month alone after a steep ascent from $22.11 to as high as $75 so far today. Does this mean it is time to join the bulls and invest…

Read More »

Ahead of the Bitcoin Curve Since the Tesla Let-Down

The last time we wrote a free article about Bitcoin was on May 13th. The price of the biggest cryptocurrency had just plunged from over $57k to sub-$46k after Tesla CEO Elon Musk tweeted the company will no longer accept it as payment. As we showed in that article, the Tesla disappointment was just a…

Read More »

ETHUSD ‘s Bearish Elliott Wave Cycle Almost Complete

The time between May 12th and May 23rd is a period ETHUSD bulls would want to forget. The second largest cryptocurrency fell from an all-time high of $4380 to as low as $1730. While some might consider crypto to be gold 2.0, crashes like that one reveal that the space is still a wild west…

Read More »

Harmony Coin Draws Bullish Elliott Wave Setup

Bitcoin, Ethereum, Dogecoin, you name it. There are already thousands of cryptocurrencies in existence, most of which serving no other than speculative purpose. The fact that even the big guys on Wall Street can’t resist the urge to dip their toes in the space only makes retail investors more confident. We remain skeptical. Today, however,…

Read More »

ETHUSD Wave Pattern Can Disappoint the Bulls Soon

For the crypto space, it is 2017 all over again, except bigger. The two biggest cryptocurrencies – Bitcoin and Ethereum – exceeded their previous records and then some. ETHUSD, in particular, is now approaching $2600 and is not very far from doubling its January 2018 peak level. Furthermore, ETHUSD is up 32-fold from its December…

Read More »

Bitcoin Can Never Be a Global Currency. Here’s Why

Bitcoin’s relentless rise in the past year forced even some its most vocal critics to throw in the towel. Kevin O’Leary, for example, used to call Bitcoin “garbage”, but recently said that he has 3% of his portfolio in BTC and ETH. And indeed, many, us included, have been calling Bitcoin a bubble for years,…

Read More »

Bitcoin: When Prediction is Hard, You Can Still Prepare

Bitcoin bulls are in retreat, at last. After the cryptocurrency’s meteoric surge to $42 000 at the start of 2021, the price dipped below $29 000 earlier today. And since BTC is one of the most-widely followed assets these days, experts were quick to offer their views. J.P. Morgan analysts stated that $40k is a…

Read More »

More analyses