close icon

Price of Bitcoin Short-Term Vulnerable

In our previous article about the cryptocurrency, titled “Bitcoin ETF Rejected by the SEC? No Problem!”, we expressed a bullish opinion, shortly after the price of bitcoin touched a low of $944. The positive outlook was motivated by the Elliott Wave interpretation of the 4-hour chart below.
price of bitcoin chart
As visible, this chart made the classic 5-3 wave cycle visible, suggesting the virtual currency’s decline from $1350 is approaching to its end and a significant recovery should follow. In addition, the starting point of the five-wave impulse at $751 was supposed to stay out of danger. Almost a month later, the 4-hour price chart of bitcoin looks like this.
price of bitcoin 4h chart
The bears managed to achieve a third breach of the 61.8% Fibonacci level, but still could not threaten the invalidation level at $751. Thus, the bullish scenario was still alive and all we had to do is stay calm and stick to it. So far, this strategy is paying off with bitcoin price hovering above the $1200 mark again.

Now, the speed and sharpness of the current rally from $891 to $1220 suggests the uptrend has resumed. On the other hand, bitcoin might have gone too far too fast. Does this mean it is time for a pullback? The hourly chart below might help us find the answer.
elliott-wave-chart-price-of-bitcoin 1h
If this chart could speak, it would probably say “proceed with caution.” First of all, the advance from $891 could be seen as a complete impulsive sequence. According to the theory, it should be followed by a three-wave decline, before the bull trend continues. Second, the relative strength index shows a bearish divergence between the last two swing highs.

In conclusion:

  • The Wave principle works for the price of bitcoin, as well
  • Bitcoin’s uptrend has resumed
  • On the other hand, we should prepare for a short-term dip

If this is the correct count, we can move the invalidation level from $751 up to $891. However, buying right away does not seem to be the best decision, since a 100-dollar correction could be expected.



Stay informed with our newsletter

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

Privacy policy
You may also like:

ETHUSD ‘s Bearish Elliott Wave Cycle Almost Complete

The time between May 12th and May 23rd is a period ETHUSD bulls would want to forget. The second largest cryptocurrency fell from an all-time high of $4380 to as low as $1730. While some might consider crypto to be gold 2.0, crashes like that one reveal that the space is still a wild west…

Read More »

Bitcoin Bears Needed a Catalyst. Tesla Obliged

Tesla CEO Elon Musk announced the company would stop accepting Bitcoin as payment due to environmental concerns. The EV-maker’s Bitcoin stunt lasted for just three months, apparently the time it took for its CEO to realize how inefficient and energy-consuming BTC mining is, something we wrote about in March. The price of Bitcoin, of course,…

Read More »

Harmony Coin Draws Bullish Elliott Wave Setup

Bitcoin, Ethereum, Dogecoin, you name it. There are already thousands of cryptocurrencies in existence, most of which serving no other than speculative purpose. The fact that even the big guys on Wall Street can’t resist the urge to dip their toes in the space only makes retail investors more confident. We remain skeptical. Today, however,…

Read More »

ETHUSD Wave Pattern Can Disappoint the Bulls Soon

For the crypto space, it is 2017 all over again, except bigger. The two biggest cryptocurrencies – Bitcoin and Ethereum – exceeded their previous records and then some. ETHUSD, in particular, is now approaching $2600 and is not very far from doubling its January 2018 peak level. Furthermore, ETHUSD is up 32-fold from its December…

Read More »

Bitcoin Can Never Be a Global Currency. Here’s Why

Bitcoin’s relentless rise in the past year forced even some its most vocal critics to throw in the towel. Kevin O’Leary, for example, used to call Bitcoin “garbage”, but recently said that he has 3% of his portfolio in BTC and ETH. And indeed, many, us included, have been calling Bitcoin a bubble for years,…

Read More »

Bitcoin: When Prediction is Hard, You Can Still Prepare

Bitcoin bulls are in retreat, at last. After the cryptocurrency’s meteoric surge to $42 000 at the start of 2021, the price dipped below $29 000 earlier today. And since BTC is one of the most-widely followed assets these days, experts were quick to offer their views. J.P. Morgan analysts stated that $40k is a…

Read More »

Ahead of Bitcoin ‘s $3k+ Fourth Wave Correction

Thursday was a disappointing day for Bitcoin bulls. The largest cryptocurrency by market cap fell by over $2000 to an intraday low of $16 218 yesterday. Given Wednesday’s high of $19 490, BTCUSD lost over $3200 per coin in just two days. Instead of the new all-time high many expected, traders had to swallow a…

Read More »

More analyses