Ever since it climbed to $6180, Bitcoin has been rather indecisive. The price of the biggest cryptocurrency by market capitalization fell to $5366 at one point on October 25th. Fortunately, it was Wednesday, which means it was time for our mid-week update. In a single .pdf file we provided a short-term update on all seven instruments covered in our premium packages, starting with the following 4-hour price chart of BTCUSD. (some marks have been removed for this article)
This chart was accompanied by the following text: “BTCUSD’s decline from $6180 is slow and choppy, indicating the move is corrective.” According to the Elliott Wave Principle, once a correction is over, the larger trend resumes. Since Bitcoin’s larger trend was still pointing north, we assumed a new all-time high should soon be expected. In addition, this chart provided us with a specific invalidation level at $5101 to guide us. Instead of discouraging them, the market was actually giving the bulls another chance to lift the price of Bitcoin higher. By Sunday afternoon, October 29th, when we send our full analyses to clients, the hourly chart of the virtual currency was even more encouraging. See it below.
The hourly chart allowed us to recognize a textbook 5-3 cycle pointing to the upside. A five-wave impulse from $5366 to $5994 was followed by a (w)-(x)-(y) double zig-zag correction down to $5646. Since the theory states that the trend was supposed to resume in the direction of the five-wave pattern, there has been no reason to abandon the positive outlook yet. Furthermore, we could now move the invalidation level from $5101 up to $5366, because the double zig-zag correction was not allowed to retrace 100% of the impulsive sequence. Just several hours after we sent this chart to subscribers, BTCUSD did this.
In a fast and swift fashion, Bitcoin’s price shot up to a new all-time high of $6317 so far. Does this new breakout mean it is time to join the bulls? Typically, trading with the trend is a profitable strategy. The problem is that a trend is easy to identify just when it is about to end. No trend lasts forever and we strongly doubt Bitcoin’s will. The “Crypto Bubble” is getting more dangerous as the price rises, not less…