Less than two months ago, it looked like there was no way Donald Trump’s global trade war wasn’t going to cause a global economic disaster. Stocks were crashing and Bitcoin, whose price was already down substantially from its all-time high above $109k, fell below $75k in early-April. Given the geopolitical situation, even the most devoted crypto believers would be forgiven for thinking that this was just the beginning.
Instead, Bitcoin is now hovering at new records, even though the current 30% tariff on Chinese imports to the US is not much lower than the initial 34% which triggered the selloff in the first place. Not to mention the still-significant 10% on all other countries. If you think that Bitcoin’s whipsaw recovery doesn’t make any sense in the traditional way, we agree.
It makes Elliott Wave sense, though. The chart below, shared with our Pro subscribers on April 13th, shows that the structure of the preceding decline paved the way for the current surge to new records.
There are three main types of Elliott Wave corrections – zigzags, flats and triangles. Oftentimes, however, the market would combine two or more of them to create a more complex corrective pattern. In the case of Bitcoin, the decline from over $109k to sub-$75k looked like a triple zigzag, marked w)-x)-y)-x)-z). Waves w), y) and z) were all simple a-b-c zigzags, but the second x) wave was a triangle, labeled a-b-c-d-e.
Similar Elliott Wave setups occur in the Forex, commodity and stock markets, as well. Our Elliott Wave Video Course can teach you how to uncover them yourself!
There was no way to know in advance that this corrective structure would form. Once it was in place, however, the only way to go was up. The end of a correction means the resumption of the preceding trend. And since Bitcoin was clearly in an uptrend prior to its January 20th top, that uptrend was supposed to continue.
Over the following forty days, the price of the biggest crypto climbed from under $85k to almost $112k. In spite of all the chaos, Elliott Wave analysis put us ahead of it. Now, should the new high be seen as another buy signal? We cannot reveal this here, but our Pro subscribers already know our answer.
In our Elliott Wave PRO subscriptions we provide analyses of Bitcoin, Gold, Crude Oil, EURUSD, USDCAD, USDJPY and the S&P 500 every Sunday and Wednesday! Check them out now!
