Bitcoin Crash Incoming? | Elliott Wave Theory Market Forecast

31 ส.ค.

Greetings, fellow traders,

In this post, I employ "Elliott Wave Theory" to analyze and predict Bitcoin's price movements. The decision to utilize this theory stems from its robust framework for interpreting market cycles, which is essential for precise forecasting in the volatile cryptocurrency market.


1️⃣ The value of an asset directly reflects the sentiment of investors participating in the market.

2️⃣ When investors are optimistic, increased demand naturally drives prices up, while fear among investors leads to price declines.

3️⃣ Prices are a direct representation of investor sentiment, and the "Elliott Wave Theory" is a framework that patterns these price movements.

✅ Conclusion
By applying the "Elliott Wave Theory," it is possible to anticipate Bitcoin's next move.


Therefore, let's now dive deep into the "Elliott Wave Theory" to both predict Bitcoin's next movements and gain a thorough understanding of this theory.

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✔️BTCUSDT.P / BINANCE / 8H


This chart review covers the period from January 24, 2024, to March 14, 2024.

During this timeframe, a rare "Double Extended Impulse Wave" pattern appeared, characterized by an extended 5th wave.


The supporting evidence for this pattern is as follows:

1️⃣ A breakout from the 1-3 trendline.
2️⃣ The 3rd wave extended beyond 1.618 times the length of the 1st wave.
3️⃣ The 5th wave extended beyond 1.618 times the length of the 3rd wave.
4️⃣ The 4th wave took longer to develop compared to the 2nd wave.


I will explore these points in greater detail with the accompanying chart analysis below.

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✔️BTCUSDT.P / BINANCE / 8H


This chart includes the evidence discussed earlier, specifically the first point mentioned. (Reference: 1️⃣)

In wave analysis, trendlines play a crucial role. A break in the trendline often signifies the end of a wave or highlights the unique characteristics of that wave.

In this post, we'll focus on the waves marked on the chart, so please pay close attention to the attached chart.

The extension of the 5th wave is significantly influenced by the trendline connecting the peaks of the 1st and 3rd waves.

This trendline is especially important in the context of a "Double Extended Impulse Wave."

A "Double Extended Impulse Wave" indicates a strong buying momentum in a bull market or a strong selling momentum in a bear market.

Therefore, it is expected that the upper trendline (the 1-3 trendline) would be breached as the wave progresses.
(leading to a sharp rise in a bull market or a steep fall in a bear market).

Please refer to the chart provided above.

There are five instances of "Over shooting", indicating a strong bullish market.

This example shows how a single trendline can help identify the market's strength, weakness, and the type of wave pattern in play.

Now, let's move on to the next chart.

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✔️BTCUSDT.P / BINANCE / 8H


This chart includes the evidence discussed earlier, specifically the second and third points mentioned.
(Reference: 2️⃣3️⃣)

Additionally, this chart illustrates the internal Fibonacci ratios of the extended impulse wave.


The characteristics of the internal Fibonacci ratios for an extended 5th wave in an impulse wave are as follows: (Satisfied: ✔️ / Not Satisfied: ✖️)

✔️ The 3rd wave rises between 100% and 261.8% of the length of the 1st wave.
✔️ The 5th wave rises 161.8% of the (0-3) length, measured from the end of the 4th wave. (It should be shorter than 261.8%.)
✔️ The 5th wave is longer than the shorter of 100% of the (0-3) length and 161.8% of the 3rd wave.


Since this wave satisfies all the above conditions, it is highly likely to be a Double Extended Impulse Wave with an extended 5th wave.

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✔️BTCUSDT.P / BINANCE / 8H


This chart represents the external Fibonacci ratios of the extended impulse wave.
(For an impulse wave with an extended 5th wave, the external ratios are considered more reliable than the internal ratios.)


The characteristics of the external Fibonacci ratios for an extended 5th wave in an impulse wave are as follows:
(Satisfied: ✔️ / Not Satisfied: ✖️)

✔️ The length of the 5th wave, measured from the end of the 3rd wave, forms at 100%, 161.8%, or 261.8% of the (0-3) length.


Since this wave satisfies all the conditions, it is highly likely to be a "Double Extended Impulse Wave" with an extended 5th wave.
(The author also considers the external ratios to be highly reliable.)

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✔️BTCUSDT.P / BINANCE / 8H


This chart includes the fourth piece of evidence mentioned earlier (Reference: 4️⃣).

One of the most essential concepts in "Elliott Wave Theory" is "The Rule of Alternation."

This principle is foundational to understanding market movements and is critical to the rules governing wave progression. Without it, Elliott Wave Theory would lose much of its practical value.

"The Rule of Alternation" is most clearly demonstrated in the period of corrective waves.

In the chart provided above, you’ll notice a comparison between the length of the 2nd wave and the 4th wave.

Typically, before an extended wave appears, the market tends to undergo a longer or deeper correction. In this case, the 4th wave is noticeably longer than the 2nd wave, which satisfies this condition.

This observation significantly increases the reliability of the wave pattern.

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✔️BTCUSDT.P / BINANCE / 1D


Now, let's discuss the potential future direction.

If the low point of the 5th wave within the extended impulse wave breaks, it is likely that this impulse wave marks the final wave of a larger wave pattern.

In simpler terms, the 5-wave extended impulse wave we've discussed so far may represent the last wave of the current upward trend.

To put it even more clearly, if the price falls below the $50,922.5 level, there is a high probability that the market has transitioned into a downtrend.

Please refer to the following chart for further details.

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✔️BTCUSDT.P / BINANCE / 1D


Based on the assumption that the market has transitioned into a downtrend, I’ve constructed the following scenario.

It appears that a Corrective Wave (Flat) has already occurred, and the market is currently experiencing a correction in response to this wave (indicated by the red dotted line).

According to this scenario, even if the price experiences an upward movement, it is likely to be a technical rebound within the broader context of a continuing downtrend.

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Conclusion

Today, we applied the Elliott Wave Theory to the actual Bitcoin chart to analyze the market.

I made every effort to maintain an objective perspective.

I am aware that many traders and investors are anticipating a continued upward trend. However, my intent in presenting a bearish scenario was not to gain attention, but rather to analyze the market as objectively as possible.

It’s important to approach the market rationally, rather than simply calling for a rise without substantial evidence.

I encourage you all to remain wise traders and investors who do not succumb to 'FOMO' (Fear of Missing Out) and always maintain an objective view of the market.

Thank you for taking the time to read this post.

If you found this analysis helpful, I would greatly appreciate it if you could give it a "boost." Should there be significant interest in this post, I'll consider creating follow-up analyses.

31 ส.ค.

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- This is not a buy or sell recommendation.
- It is a personal perspective and should be used for reference only.
- All decisions and responsibilities lie with you.