The day after Bitcoin (BTC) had reached $66980; I used the Elliott Wave Principle (EWP) to determine that a break below $59K would ideally go to $53K+/2K before the cryptocurrency would stage its next rally to $90K+. See here. That break happened, but BTC only reached as low as $58K on October 27 and is now essentially back at the scene of the crime.
Since the market does not have to reach ideal downside target zones, especially not in Bull markets where “upside surprises and downside disappoints”, the question is, “has BTC already bottomed for wave-ii and is it now ready to rock n roll to $90K+, or does it have one last trick up its sleeve before we see that move?” Figure 1 shows the two options we have.
Figure 1. Bitcoin daily charts with detailed EWP count and technical indicators.
A break below last week’s $58128 low is needed to confirm a more complex wave-ii to ideally $53,4K.
Figure 1A shows the Bullish option for BTC. It means wave-ii did the minimum required retrace as there were three (green) waves down from the recent all-time high (ATH), and corrections are at a minimum comprised of three waves. But, corrections can also become more complex and tag on another set of three waves. Or, as I always say to my premium crypto trading members, “after three waves down, always expect at least three waves back up.” So far, BTC has done three waves back up, labeled in Figure 1B as (grey) minute a, b, c. Thus the current rally can still be a counter-trend rally/bounce to ideally as high as $64495, where wave-c = wave-a (grey dotted arrow). Today, the crypto got to as high as $64284. Close enough?
Hence, Bitcoin has set itself up for a picture-perfect EWP-based if/then scenario: break back below $58128 and (green) wave-c -see Figure 1B- is underway as the wave-ii correction then morphs from simple into complex. The ideal target zone would then once again be roughly $53+/-2K (green rectangle). But, if the cryptocurrency decides to break out and make new ATHs without breaking down first, I must accept wave-ii was shallower than expected.
The correction, in that case, did the minimum (the orange rectangle in Figure 1B shows the potential range of 2nd waves, while the red rectangle shows the ideal range), which is enough because the markets do not owe us anything. Therefore I always “anticipate, monitor and adjust if necessary.”
Bottom line: My forecast from almost two weeks where I anticipated a pullback was correct. However, so far, the retreat fell a bit short of the ideal target zone of $53+/-2K. $58K could have been all she wrote, and BTC can be in the starting gates for wave-iii to $90K. If the cryptocurrency does not break below $58128, it will directly set up such a rally. BTC will have to break below $46K to suggest something much more bearish is afoot. This option, albeit possible, is not my preferred path.