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Bitcoin Targeting $10K Before a 300% Rally?

By:
Dr. Arnout Ter Schure
Published: Nov 21, 2022, 19:57 GMT+00:00

The FDX/Alameda debacle has triggered an impulsive path lower to $9-11K from where we should expect at least a multi-month bounce back to $30-40K.

Bitcoin FX Empire

A Historical Perspective

In this article, I will take you on a journey using the Elliott Wave Principle (EWP) to try to better understand Bitcoin’s (BTC) past, current, and future price action. The longest record of BTC’s price started in July 2010. See Figure 1 below. Before that, the first recorded price of Bitcoin was $0.00099.

Namely, on The BitcoinTalk forum, member NewLibertyStandard set up New Liberty Standard Exchange, and another forum user – Sirius – sent him 5050 BTC in exchange for $5.02 through PayPal. Thus our analysis starts on July 19, 2010, when BTC was recorded at $0.09.

Figure 1. Bitcoin historical price chart with detailed EWP count and technical indicators.

From there, we can count five waves up to the June 2011 high: (Pink) Cycle 1. BTC lost around 90% over the next six months: Cycle 2. The cryptocurrency moved in five black (major) waves higher from that low to the 2013 high: Blue Primary I. It bottomed in early 2015, losing around 80%: Primary II. The next five-wave advance caused a high in December 2017: Primary III. The next low was a year later: Primary IV. Again BTC had lost ~85% of its value.

Ultimately, BTC topped early November 2021 at $69K after another five waves up. That high was Cycle 3. It is currently trading at $16K—a 77% decline. The current fall is nothing out of the ordinary and has likely further to go based on the past three declines. The above-described pattern, EWP path, can also be captured with a simple yearly-resolution chart. See Figure 2 below.

Figure 2. Bitcoin yearly candlestick chart with EWP count.

Applying the EWP count as in Figure 1, the annual chart shows BTC is most likely in a more significant (blue) Primary W-A, which W-B will follow, and -C to complete all W-C4. Namely, 4th waves are corrective and thus travel in at least three waves, never five. The monthly chart, see Figure 3 below, corroborates the yearly and entire-price-action charts’ EWP counts.

It tells us BTC is most likely in the last (red W-iii, iv, v) waves to around $10K+/-1K before a more significant multi-month counter trend rally (blue W-B) should start. The dotted blue arrows show the anticipated path (inaccurate in time).

Figure 3. Bitcoin monthly candlestick chart with detailed EWP count.

This counter-trend rally targets ideally the 38.2-62.8% retrace of the entire prior, now over one year long, decline: $30-50K. From there, the final crash wave, W-C of W-C4, will take hold and bring BTC back to around $6K+/-2K. The cryptocurrency will, by then, have given back most of its gains since the 2018 low, which is consistent with the prior percent losses (~90%).

Besides, the EWP tells us “a one-degree higher 4th wave often bottoms in the territory of the previous one-degree lower 4th wave”, i.e., Cycle 4 vs Primary IV.

Current Price Action Suggests a Low of Around $10+/-1K

Figure 4 below shows the weekly candlestick chart of BTC, where each candlestick represents one whole week, and the current price action suggests the cryptocurrency is now wrapping up red W-iii, iv, and v of black W-5 of blue W-A. That means the decline from the November 2021 all-time high was five waves, and we should expect all of W-C4 to become a zigzag. A 5-3-5 pattern.

The red boxes show the ideal Fibonacci-based target zones for red W-iii, -iv, -v. It follows a low at around $10K+/-1K should be expected. From there, blue W-B should then commence. Last several months and top out at about $30-50K, depending on where exactly W-A will bottom. But for now, we have some excellent initial downside and upside targets to work with: anticipate, monitor, and adjust.

Figure 4. Bitcoin weekly candlestick chart with detailed EWP count.

Since the devil is always in the details, it is also prudent to look at the daily resolution chart. See figure 5 below. Since Elliott Waves are fractal, i.e., self-similar or repeating patterns, red W-iii consists of five smaller waves: green W-1, 2, 3, 4, 5. BTC is currently working on the W-3, 4, and 5 sequences. The dotted green and red arrows show the anticipated ideal path forward (inaccurate in time).

Figure 5. Bitcoin daily candlestick chart with detailed EWP count.

Based on this level of detail, the ideal downside target for W-v of -5 of -A is between $9566-11315. Hence, I am looking for a low at around $10+/-1K. That said, BTC must break above $18185 and then above $21475 to tell us the downside has already been completed in a rather unorthodox fashion. For now, I find that less likely. Last but not least, after wave four comes wave five. Thus, once W-C4 ends, BTC will enter W-C5 targeting $150-1,000K.

About the Author

Dr. Ter Schure founded Intelligent Investing, LLC where he provides detailed daily updates to individuals and private funds on the US markets, Metals & Miners, USD,and Crypto Currencies

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