close icon

Bitcoin’s Crash and Its Elliott Wave Meaning

If the market was a human being, every psychiatrist would easily be able to diagnose it with bipolar disorder, but when it comes to Bitcoin, it is nothing short of schizophrenia. The market capitalization of the cryptocurrency more than doubled in less than a month, after its price climbed from $1348 at the start of May to as high as $2760. At one point on Thursday, Bitcoin was up more than $320 or over 13% for the day. Then, almost in the blink of an eye, it crashed by over $500 in under 2 hours and lost $400 more in the next couple of days.

Truth is, the investing community can hardly be more polarized. While some say that Bitcoin is the future and the uptrend is just getting started, others believe we are witnessing a bubble similar to the tulip mania in the 17th century. Time will tell. Fortunately, the Elliott Wave Principle can help us reduce the influence of emotions and extract some information directly from the market through the price charts, to guide us, at least in the shorter term.bitcoin updated elliott wave chart

The 4-hour chart above shows Bitcoin’s so far phenomenal 2017. The virtual currency initially fell to $751 in January, but then recovered in impulsive fashion to a new all-time high of $1350 two months later. Then, the SEC’s rejection of the first Bitcoin ETF coincided with another correction in wave 2, when the bears dragged prices below the $900 mark. And just when doubts started creeping in, the most powerful phase of every impulse, wave 3 of (3) to the north, began. It was a wonder to behold, traveling all the way up from $891 to $2760.

Still, even the strongest of trends are interrupted by a correction from time to time. In Bitcoin’s case, it appears the recent sharp plunge from $2760 to $1850 fits in the position of wave 4 of (3). This means that Bitcoin’s uptrend is still in progress and the price of the asset should continue to the north in a series of fourth and fifth waves for a while. If this is the correct count, $3000 is still there for the taking. In addition, wave 4 seems to have ended at the 50% Fibonacci level, which is the most fourth waves are usually able to retrace. Also, the lower line of the trend channel served as support.

It looks like the bulls are ready to attack the next big psychological figure. Anyway, it has been a long way since “Bitcoin Hiding an Ace in the Sleeve”.

Stay informed with our newsletter

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

Privacy policy
You may also like:

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 »

Ahead of Bitcoin ‘s $3k+ Fourth Wave Correction

Thursday was a disappointing day for Bitcoin bulls. The largest cryptocurrency by market cap fell by over $2000 to an intraday low of $16 218 yesterday. Given Wednesday’s high of $19 490, BTCUSD lost over $3200 per coin in just two days. Instead of the new all-time high many expected, traders had to swallow a…

Read More »

Ahead of Bitcoin ‘s 2017-Style Surge with Elliott Wave

Bitcoin is surging again. The cryptocurrency is approaching $16k in a rally reminiscent of the late-2017. Near-zero interest rates make speculative instruments such as Bitcoin very appealing. The BTC-as-an-inflation-hedge narrative is also helping the bulls right now with the Fed and ECB pumping cash into the financial system. But Bitcoin is far from a true…

Read More »

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 »

More analyses