Bitcoin Elliott Wave Theory suggests BTC price can drop to $25.5K this year
The bearish outlook by the Elliot
Wave Theory appeared as Bitcoin
tumbled below $35,000.
The ongoing Bitcoin (BTC) price
correction could continue as per
almost a century-old technical analysis
principle called "Elliott Wave Theory".
The interim bearish outlook put forth
by the Elliot Wave Theory appeared as
Bitcoin tumbled below $35,000 amid
the Russia-Ukraine conflict.
Bitcoin wave fractal eyes
repetition
The theory, which divides a price cycle
into two sets-one consisting of five
upward-trending impulse waves and
the other having three follow-up
corrective waves-points to the
possibility of BTC's price dropping
toward $25,500 in 2022.
At the core of its bearish outlook is its
record of predicting cyclical tops and bottoms throughout the Bitcoin
market's history, as shown in the chart below.
BTC/USD weekly price chart featuring Elliott Waves.
Source: Trading View
The Bitcoin chart shows three primary
impulse waves (1, 3, and 5 in red) and
two corrective waves (2 and 4 in red).
The fifth wave is still in development,
underscoring BTC's potential to reach
above $100,000 in the future. But together, these five waves represent an
upward structure that will likely
exhaust at wave 5 and follow up with
three corrective waves: A, B, and C.
Meanwhile, each large wave marked in
red consists of sub-waves, featuringa
five-wave advance (impulse) in the
direction of the trend of one large
degree (from 1 to 5 in black), followed
by a three-wave corrections against the
higher degree trend (from a to c in
blue).
Between 2012 and 2018, Bitcoin's price
has repeatedly rallied between wave 1
to wave 5 followed by a correction
from wave a to wave c. Each time,
wave c, which coincided with Bitcoin's
200-week exponential moving average
(50-week EMA), marked BTC's price bottom and the completion of the so-
called Elliott Wave Cycle, be it in 2015
or 2018.
Related: FTX CEO weighs in on Bitcoin
market outlook amid Ukraine crisis
After 2018, Bitcoin entered a new
Elliott Wave Cycle. It has already
undergone the five-wave advance
from near $3,200 in December 2018 to
around $69,000 in November 2021
and is now in the midst of its three-
wave correction, awaiting the
formation of its final wave c.
Considering the next wave c appears
around the 200-day EMA, it could mean
BTC will hit levels around $25,500.
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