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:

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 »

Ahead of Bitcoin ‘s 2017-Style Surge with Elliott Wave

Bitcoin is surging again. The cryptocurrency is approaching $16k in a rally reminiscent of the late-2017. Near-zero interest rates make speculative instruments such as Bitcoin very appealing. The BTC-as-an-inflation-hedge narrative is also helping the bulls right now with the Fed and ECB pumping cash into the financial system. But Bitcoin is far from a true…

Read More »

Ethereum ‘s Collapse Carries an Elliott Wave Message

Ethereum, still the second largest cryptocurrency with a market cap of ~$39B, was enjoying a strong 2020. ETHUSD was up 282% YTD until the start of September. The last few days, however, seem to have brought the bulls’ winning streak to its end. The price of Ethereum collapsed from as high as $489 to less…

Read More »

Bitcoin Is Up 35% Since Christmas. Here is Why

The price of Bitcoin was hovering around $7200 on Christmas, down from $13 880 six months earlier. And while the majority of headlines were all doom and gloom, the cryptocurrency‘s price charts were telling a very different story. Bitcoin was down 48% from its recent top, but that wasn’t the time to join the bears.…

Read More »

Bitcoin ‘s 40% Surge didn’t Come Out of Nowhere

On Thursday, we showed you how Elliott Wave analysis set the stage for a Bitcoin plunge to under $7700 ten days before Mark Zuckerberg’s Libra testimony. The cryptocurrency was barely holding above $7400 at the time of writing and many thought it was prone to decline even further. Since Bitcoin is among our premium instruments,…

Read More »

BTCUSD: Libra Testimony Didn’t Cause the Fall

Facebook’s Mark Zuckerberg testified before Congress on October 23rd about the company’s Libra cryptocurrency project. The hearing didn’t go as smooth as the crypto community hoped, which reflected on the price of digital assets such as Bitcoin. At one point on Wednesday, BTCUSD was down by over $750 for the day. But was Zuckerberg’s Libra…

Read More »

The Bears Rule Over Ethereum Under $225

We last wrote about Ethereum on August 9th. The second largest cryptocurrency had plunged by 42% in less than two months and was hovering around $210. Unfortunately, our Elliott Wave analysis of the decline from $363 pointed to more weakness ahead. See the chart below to refresh your memory. This chart was included in our…

Read More »

More analyses