As Bitcoin fell below $35,000, the Elliot Wave Theory’s gloomy forecast became apparent.
According to the “Elliott Wave Theory,” a nearly century-old technical analysis approach, the current Bitcoin (BTC) price decline could continue.
As Bitcoin fell below $35,000 amid the Russia-Ukraine war, the Elliot Wave Theory issued an intermediate pessimistic forecast.
Repetition of Bitcoin wave fractal eyeballs
According to the theory, which divides a price cycle into two sets—one with five upward-trending impulse waves and the other with three follow-up corrective waves price BTC’s might plummet to $25,500 in 2022.
Its pessimistic forecast is based on its track record of correctly anticipating cyclical tops and bottoms in the Bitcoin market, as demonstrated in the figure below.
Three basic impulse waves (1, 3, and 5 in red) and two corrective waves can be seen on the Bitcoin chart (2 and 4 in red). The fifth wave is still in the works, indicating that BTC has the potential to surpass $100,000 in the future. These five waves, however, collectively form an upward structure that will most likely exhaust at wave 5 and be followed by three corrective waves: A, B, and C.
Meanwhile, each huge wave shown in red is made up of sub-waves, each of which includes a five-wave advance (impulse) in the direction of a one-degree trend (from 1 to 5 in black), followed by a three-wave corrective against the higher-degree trend (from a to c in blue).
Bitcoin’s price has frequently climbed between waves 1 and 5 between 2012 and 2018, followed by a correction from wave a to wave c. Whether it was in 2015 or 2018, wave c, which corresponded with Bitcoin’s 200-week exponential moving average (50-week EMA), signaled BTC’s price bottom and the end of the so-called Elliott Wave Cycle.
Bitcoin launched a new Elliott Wave Cycle after 2018. It has already completed the five-wave advance, rising from roughly $3,200 in December 2018 to around $69,000 in November 2021, and is now in the middle of its three-wave corrective, anticipating the development of its final wave c.
Given that the next wave c occurs around the 200-day EMA, BTC may reach values of roughly $25,500.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.