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Bitcoin ETF Rejected by the SEC? No Problem!

Bitcoin ETF Rejected by the SEC? No Problem!

Last Friday, March 10th, the SEC rejected a proposed change in its rules that would have allowed the Winklevoss brothers to create the first Bitcoin ETF. Following the decision, the price of the cryptocurrency fell over 20%, from nearly $1290 to as low as $975 in a matter of minutes. And while the speed and depth of the move were spectacular, the selloff itself was hardly a surprise. In “Bitcoin Elliott Wave Outlook Ahead of the SEC”, an ARTICLE published several hours before the SEC announcement, the following 4-hour chart of BTCUSD helped us prepare for what was going to happen.
bitcoin etf price chart
As visible, we anticipated a three-wave decline to at least $1100 before the uptrend could resume. The reason for our short-term bearishness ahead of the SEC was the Elliott Wave Principle, which postulates that every impulse is followed by a three-wave correction in the opposite direction. Since there was an easily recognizable five-wave sequence between $751 and $1350, we thought it was time for the bulls to catch a break. Besides, the relative strength index was showing the typical bearish divergence between the tops of waves (iii) and (v), further supporting the negative outlook. So, according to the Wave principle, there was no reason to load up on bitcoins ahead of SEC. The updated chart below shows how things went.
bitcoin updated chart
Well, the SEC-inspired Bitcoin crash now fits perfectly in the position of wave “a” of 2. The following recovery to $1260 should be wave “b” and the current decline to $944 so far should be labeled as wave “c”. It is also interesting to notice that despite the panic, the bears seem to be running out of power near the 61.8% Fibonacci level, where second waves often terminate. According to the Wave Principle, the 5-3 wave cycle is likely to produce another phenomenal rally towards a new all-time high.

Less than ten days after the SEC’s rejection of the first Bitcoin ETF, the price of the cryptocurrency lies below $1000. However, if this is the correct count, reaching a new all-time high is just a matter of time. In fact, our long-term outlook suggests the price of the digital currency is going much, much higher. No Bitcoin ETF? No problem.*

*This article was first published on March 16th. It has been updated in response to Bitcoin’s recent behavior.

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