It has been twelve strange days since our last update, titled “Bitcoin Traders Running for the Hills Already?” Strange, because of what happened to the price of the cryptocurrency during that time. But let’s take a look at the Elliott Wave chart we published on July 12th, while BTCUSD was trading near $2330 and see what went according to plan and what did not.
As visible, the primary scenario suggested Bitcoin was in the middle of a triangle correction in the position of wave (4). It was supposed to stay in a range for a while before the uptrend resumes in wave (5) of III up.
What went wrong is that wave (4) did not develop as a triangle. Instead, the market chose to draw a w-x-y double zig-zag, whose wave “y” fell to the low $1800s. What went as planned was that despite this deep retracement, the uptrend was still intact. Once wave (4) ended, the price jumped sharply for the much anticipated wave (5) of III. According to the BraveNewCoin Liquid Index for Bitcoin, the bulls took the virtual currency to as high as $2927 on July 20th. How do the recent developments fit into the bigger picture?
Keep in mind that this is a logarithmic chart, which puts a 1% price change in 2016 on an equal scale to a 1% price change in mid-2017. That is why the fluctuations at the beginning of the chart look larger that those at its end, even though in reality they are not.
The logarithmic chart gives us a better perspective by showing us the wave structure of the entire uptrend since the bottom in January, 2015. If this is the correct count, wave III is almost over. Once wave (5) climbs to a new all-time high, somewhere above $3000, another noteworthy decline should follow in wave IV. Then, wave V should complete the entire impulsive sequence in wave (V).
This wave (V), in turn, fits into an even bigger wave count on the weekly chart of Bitcoin. If you haven’t read “Bitcoin Bubble: Is It “Different This Time?”, we suggest you do. The bulls are still in charge, yes, but we believe their days are numbered.