Bitcoin’s Last Push For a Local Top?

Dr. Arnout Ter Schure

The current move above the November 9 high means Bitcoin will ideally target around $41K before we see a ~25% haircut.

Bitcoin, FX Empire

In this article:

Why One Must Always Have an Alternative

Two weeks ago, see here, we showed, by using the Elliott Wave Principle (EWP), that a local top for Bitcoin (BTC) was approaching and found,

“…[it] could thus have peaked for the green W-1, with W-2 down to ideally $30.5+/-2K now underway. … it still requires at least a daily close below the 20-day Simple Moving Average (SMA) followed by a move below at least $34118 to confirm the local top is in place. … The alternative remains that BTC needs to wrap up one more set of a 4th and 5th wave before the larger W-2 pullback occurs. … This sequence would target slightly higher at around $40K. It will require a break above the November 9 high to confirm while holding above the critical $33406 level.”

Fast forward, and the cryptocurrency only closed below the 20-d SMA once on November 21. Thus, it gave a first warning, but it never closed below the more critical $34118 level, so we remained long. And remember, price levels are one’s trade-triggers. Not opinions, sentiments, divergences, etc. Then, on November 24, BTC moved above the November 9 high. Thus, with the continued grind higher, albeit overlapping, BTC is now in that “one more set of 4th and 5th waves”; the alternative has become our primary. See Figure 1 below.

Figure 1. The daily chart of BTC with several technical indicators


Fibonacci-based Target Zones

The critical part is the word “overlapping.” Namely, BTC is likely forming an ending diagonal (ED) 5th wave. Red W-v is subdividing into five smaller (green) waves, with W-1 and W-2 complete and W-3 underway. In an ED, the 3rd wave often targets the 1.236x Fibonacci extension of W-1, measured from the W-2 low, whereas the 4th and 5th waves often and ideally target the 0.618 and 1.618x extensions.

Thus, W-3 should ideally reach around $39500, then a pullback for W-4 to ~$37750 followed by the last hurray -W-5 of W-v of W-1- to ideally ~$41050. The technical indicators will then be set up similarly to the mid-February (black) W-1 high. Like then, we should expect the current (black) W-1 to top out as well and the (black) W-2 to ideally the 50-62% retracement of W-1 at $31-33K should commence before the W-3 to most likely new ATHs kicks in. Note the previous W-2 – the March low- was also a 62% retracement.

As you may recall, we have been Bullish on BTC for quite some time, and our prognostications in recent updates have continued to come to fruition. However, our Bullish scenario is entirely invalidated below $25K. This price level is our insurance level to prevent potentially more extensive havoc on our portfolio. However, only when that happens will we change our overall, longer-term Bullish POV, which BTC is proving more and more correct for each update we provide in that,

Based on BTC’s past cycles, made up of four more minor phases, it is currently in the accumulation phase and thus close to the next Bull run, which can target $100-200+K by the end of 2025.”

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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