According to the Elliott wave theory, Bitcoin (BTC) has reached the end of the correction that began in April 2021 or is very close to it.

Of the three most likely scenarios for BTC’s near-term movement, two of them suggest that the price has bottomed out.

Long-term adjustment

In December 2018, BTC started a five-wave bullish impulse (white) and is still ongoing. If this is true, BTC is now nearing the end of wave four and another upward movement to end wave 5 will follow. The number of sub-waves is shown in red below.

Waves two and four are roughly equal in length, the former lasted 263 days while the latter developed for 284 days.

Because of the concept of alternation, there is a clear difference in these two waves in terms of time, complexity or retracement.

Since wave two ends at the 0.85 Fib retracement (white), wave four will be shallower, possibly ending at the 0.5 Fib retracement (black). This is where BTC is currently trading.

BTC/USDT 3-day chart | Source: TradingView

Potential scenarios in the short term

There are three main possibilities for short-term movement and all of them suggest that BTC is nearing the end of a correction. Trader @TheTradingHubb tweeted a BTC chart, saying that the correction will be complete soon.


The source: Twitter

The scenario outlined in the tweet is a regular flat correction pattern. In this pattern, BTC looks to be in wave C (red), which will complete a correction at the $33,300 support.

A low near $33,300 will generate a 1:1 wave A:C (red). Alternatively, it will coincide with the support line of an ascending parallel channel containing all of the movement since April.


BTC/USDT Daily Chart | Source: TradingView

The second possibility is that BTC is completing wave four of an extended flat correction. During such corrections, wave C is usually about 1.27 or 1.61 times longer than wave A.

A 1.27 target will lead to a low of $24.175. If true, BTC could recover to complete sub-wave four (black), and then drop one more time to complete the final drop.

The 1.61 target is found at $12,175. A drop to this level will invalidate the entire bullish structure because wave four will drop back into the territory of wave one. Therefore, it seems unlikely that it would fall that deep.


BTC/USDT Daily Chart | Source: TradingView

Triangle scenario

The last possibility is that BTC is completing a triangle containing wave 4.

One of the main rules of the triangle is that each wave must not retrace more than the 0.786 Fib retracement level. Currently, wave C is very close to doing so. As a result, BTC is forced to bottom at current levels and reverse its trend.

The short-term volatility of this case will be similar to that of the regular flat adjustment model mentioned above.

However, the price can consolidate for a long time before a final breakout occurs.

BTC/USDT Daily Chart | Source: TradingView

You can see the BTC price here.

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.


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