close icon

Not Your Ordinary Bitcoin Pullback…

The price of Bitcoin reached a new all-time high of $7888 two days ago, making the biggest cryptocurrency in the world even bigger by taking its market capitalization to roughly $130 billion. Today, Bitcoin’s market cap is reduced to $110 billion after its price plunged to $6490 as of this writing. Crypto traders are used to BTCUSD’s sharp rises and even sharper selloffs, but it still would not hurt to be prepared. That is why we rely on the Elliott Wave Principle, which is a technical analysis method suitable for markets, where collective psychology is the main engine. Since the crypto market is far from regulated, it is people’s optimism or pessimism that drive the price of virtual currencies, including Bitcoin.

The chart below was sent to subscribers on Sunday, November 5th. It shows that the current slump did not come out of the blue.(some marks have been removed for this article)
bitcoin elliott wave analysis november 5
To be honest, this chart depicts our alternative short-term scenario for Bitcoin’s price(the primary one was bearish right away). As visible, while the pair was trading near $7560 on Sunday, the Wave principle suggested it was not an appropriate time to join the bulls, because at least a temporary pullback in wave 4 was expected. On the other hand, even if a new all-time high was reached in wave 5 of (5), it still would not be a buy signal, because the five-wave impulse was supposed to be followed by a bearish reversal. And if the chart was not enough, the relative strength index gave us another reason to stay aside by showing a strong bearish divergence. Five days later, this is how the hourly price chart of Bitcoin looks today.

bitcoin elliott wave analysis november 10
Wave 4 formed a bottom at $6922. Then wave 5 of (5) skyrocketed to $7888. Judging from the speed and sharpness of the rally in wave 5, there must have been a lot of buy orders waiting for a bullish breakout. Alas, the uptrend quickly ran out of steam and reversed to the south for a plunge of nearly $1400 so far. The good news is that none of this was a huge surprise to experience Elliott Wave analysts, who were able to recognize the warning signs before it was too late.

Now, it is also true that the majority of crypto traders are so in love with Bitcoin that they see every dip only as a buying opportunity, completely ignoring the possibility that the price might not recover. This is a dangerous state of mind, especially since Bitcoin’s uptrend has all the traits of a bubble. Of course, this could be just another dip to buy, but chances are it is something different…



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Elliott Wave Ahead of Bitcoin ‘s Goldman-Inspired Crash

Bitcoin was trading above $7400 on Wednesday morning, following a recovery from as low as $5880. Crypto investors hoped the rally will continue, but they could not predict that just a few hours later Goldman Sachs will say it is abandoning its plans to establish a cryptocurrency trading desk, citing the ambiguous regulatory environment as…

Read More »

Bitcoin and BitMEX Trading Halt in Elliott Wave Context

Bitcoin shot up by over $400 in as little as 20 minutes today in a move some crypto experts attributed to a short squeeze during BitMEX’s scheduled maintenance. Unfortunately, BitMEX’s trading halt can explain the surge only in hindsight, which means even crypto experts did not expect it. For example, Don Le, CEO of ChainRock…

Read More »

Another Week, Another Bitcoin Bloodbath

Another week, another bloodbath for Bitcoin. The largest cryptocurrency climbed to $6815 on Monday, but the bulls quickly lost control and suffered a sharp plunge to $6072 four days later on Thursday. And while bullish predictions by crypto “experts” still call for $60 000 by the end of the year or $280 000 by 2023,…

Read More »

Bitcoin Falls Because of a 13th Century Mathematician

The price of Bitcoin, the largest cryptocurrency out there,  just fell to its lowest level since the start of the year. The previous major low of $5920, registered in early-February, has finally been breached. BTCUSD is currently hovering around $5850, which brings its total loss for the week to 9.3%. But why is Bitcoin crashing…

Read More »

Four Days Ahead of Bitcoin’s “Red Sunday”

Bitcoin is plunging yet again. Following a small recovery from $7027 to $7791 in the first week of the month, BTCUSD just breached the support of $7200 and still seems to be in a downward spiral from its December 2017 high of $19 666. But let’s ignore the bubble-or-not-a-bubble talk for a moment and concentrate…

Read More »

EOS Crypto Bulls Ready for a New Record High

In just two short weeks, EOS – the fifth largest cryptocurrency by market capitalization – fell from an all-time high of $23.03 to as low as $12.05, losing almost 48% of its value. As the price of EOS is approaching the $15 mark now, traders are wondering what to expect from now on – more weakness…

Read More »

Bitcoin: UpBit Fraud Scandal Just a Catalyst

After the price of Bitcoin rose twenty-fold in 2017, the majority of crypto investors were expecting even bigger gains in 2018 as the digital currency was finally entering the mainstream. Alas, so far that is not the case as BTCUSD plunged by roughly 70% in just a month and a half. But instead of going…

Read More »

More analyses