Beginners in Elliott Wave analysis often think that simply because they know what pattern is supposed to occur, they can trade its sub-waves in both directions. This cannot be further from the truth, simply because even if they get the patterns right, the length of those sub-waves can rarely be known. So we always advice against trying to pick tops and bottoms and instead wait for the reversals to actually take place first. The skill to anticipate a reversal, instead of joining the old trend as it approaches its end, is valuable enough to make studying Elliott Wave analysis worthwhile. Two weeks ago, for example, it warned us that Bitcoin’s rise to a new record above $126k was likely a false breakout.
This was only the third of four charts included in our Elliott Wave Pro analysis of Bitcoin, published on October 5th, 2025. On the daily chart, we’ve been tracking a pattern consisting of three-wave structures in both directions and we thought that the 4-hour one reveals its latest instalment. It looked like a simple a)-b)-c) zigzag, with five-wave impulses in waves a) and c), and a simple a-b-c in between in wave b).
If this count was correct, the next move was likely to point to the downside, once wave c) was over. Trying to short from the very top was not worth the risk, but avoiding a loss by not joining the bulls near $125k was good enough for us.
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!
Bitcoin reached a record high of $126,272 the next day, before plunging 18% to sub-$104k less than two weeks later. Now, is this selloff a buying opportunity or the start of a big bear market? In today’s Elliott Wave Pro analysis we discuss both possibilities, while keeping in mind that when in doubt, preserving one’s capital must always come first.
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!
