It is no secret that we have been skeptical about Bitcoin’s uptrend going forward for while now. We still are. The price is up by over 600% this year, showing all signs of a bubble. This, however, does not mean we have turned bearish just like that. The Elliott Wave Principle proved to be a powerful ally in analyzing the price of Bitcoin and there is no reason to stop relying on it. That is exactly what we did on Wednesday, November 1st, when we sent the mid-week updates to subscribers. In that case, the chart below suggested that “as long as the pair trades above $6316, the door to $6900 would remain open.” (some marks have been removed for this article)
As visible, there was a five-wave impulse in wave 1, so according to the theory, another one should be expected in wave 3. By Wednesday, the pattern was still missing a couple of swings in the position of waves (iv) and (v). Since the Wave Principle suggested higher prices were likely, it would not hurt to remain bullish at least in the short-term. In addition, waves (i) and (iv) were not supposed to overlap. This rule allowed us to identify a specific stop-loss level right at the top of wave (i) of 3 at $6316. Unless it gave up, $6900 was there for the taking, we thought.
As it turned out, $6900 was a modest target. BTCUSD continued climbing in wave (iii) of 3, which was followed by what appears to be a triangle correction in wave (iv). Then, wave (v) of 3 took Bitcoin to a new all-time high of $7500 earlier today, delivering an even bigger return. In the meantime, the invalidation level at $6316 was never in danger.
Maybe this rally could have been predicted even without the help of the Elliott Wave principle. After all, everyone seems to be extremely bullish on Bitcoin these days. Nevertheless, the Wave principle prepared us for the previous terrifying selloff from $4980 to $2980, as well. The next one might come sooner than you think and be the biggest so far…
