close icon

Here is Why BTCUSD is Down 40% in Less than a Month

The price of Bitcoin is declining at an unprecedented speed. Less than a month ago, BTCUSD was hovering above $5500. Last week it fell to as low as $3210, prompting Peter Mallouk, chief investment officer at Creative Planning Inc., to call Bitcoin a “dead man walking”.

However, the truth is it didn’t take a professional money manager to recognize the fact that Bitcoin was extremely vulnerable. We have been calling it a bubble for over a year and now even “hodlers” are starting to abandon crypto.

An indeed, Bitcoin has been regularly giving us reasons for pessimism. The chart below, for example, was sent to our subscribers on November 18th. It shows how the Elliott Wave Principle put traders ahead of the crash once again.
Elliott wave analysis predicts BTCUSD crash
This negative outlook actually derived from a previous bearish idea. The bigger picture remained unchanged so it made sense to simply keep shorting BTCUSD. While it was possible for wave ii to lift the pair a little higher, the anticipated wave iii down was what we were really looking forward to. Fortunately, we did not have to wait too long for it. Just a week later, BTCUSD was down to $3475.
Elliott wave traders ahead of BTCUSD selloff
So far so good, but even the strongest trend is sometimes interrupted by a correction in the opposite direction. Following a decline of over 36% in only a week, it was time to take a closer look and see if a short-term recovery should be expected. The chart below, sent to clients on November 25th, gave an affirmative answer.
BTCUSD Elliott wave pattern predicts recovery
Bitcoin’s hourly chart revealed that the structure of the plunge between $6544 and $3475 was impulsive. According to the theory, before the larger trend resumes, every impulse is followed by a three-wave correction in the opposite direction. Hence, we assumed a three-wave recovery can be expected, before the bears return. In that sense, what happened next was hardly a surprise.
Bitcoin resumes downtrend after Elliott Wave recovery
The price of Bitcoin climbed to $4410 on November 29th and some experts even hurried to recognize this recovery as the start of the next bull market. Elliott Wave analysts, of course, knew not to trust it. Less than ten days later, BTCUSD fell to a new low of $3210 on December 7th, bringing its total year-to-date loss to 83.7%.

The SEC’s continued unwillingness to approve a Bitcoin ETF, recent lawsuits against crypto promoters and miners going out of business have certainly contributed to the sharp drop in BTCUSD. In our opinion, however, the real reason for it was the Elliott wave structure and the fact that market psychology took a turn for the worse.

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:

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 »

The Bears Rule Over Ethereum Under $225

We last wrote about Ethereum on August 9th. The second largest cryptocurrency had plunged by 42% in less than two months and was hovering around $210. Unfortunately, our Elliott Wave analysis of the decline from $363 pointed to more weakness ahead. See the chart below to refresh your memory. This chart was included in our…

Read More »

Staying Two Weeks Ahead of Bitcoin ‘s Crash to $8000

The price of Bitcoin has been slowly losing ground since late-June when it touched $13 880. The bulls have been relying on the support near $9000 for over two months. They no longer have that luxury. BTCUSD was still gravitating around $10 000 on September 23rd. The next day, it plunged to $7998. While the…

Read More »

Bitcoin Fulfills Yesterday’s Bearish Elliott Wave Setup

The price of Bitcoin plunged sharply on Wednesday and keeps falling early Thursday. BTCUSD reached an intraday high of $10 280, before crashing to as low as $9555 yesterday. Today, the bears are still in charge and managed to drag the price to $9320 so far. To sum it up, Bitcoin lost almost $1000 per…

Read More »

Litecoin Lost 50% in Two Months. Is the Pain Over?

Litecoin, the fifth largest cryptocurrency, lost more than half of its market value in the past two months. Between June 22nd and August 21st, LTCUSD fell from $146 to $70. Since crypto assets have no intrinsic value, investors often compare the current price to its higher level some time ago. This leads them to the…

Read More »

More analyses