BTCUSD price has been marching higher since it bottomed in December 2018 at around $3200. By June 26th, the first-ever cryptocurrency (Bitcoin) top at approx. $13800. Unfortunately for the bulls, the rally came to a halt and Bitcoin dropped 34% to ~$9000 on July 17th. As at the time of this writing, Saturday, July 20, 2019, the bulls are recovering the losses, and BTCUSD is trading at ~$10580. However, Elliot waves are suggesting weakness ahead as the correction remains incomplete.
Let’s take a look at BTCUSD 4hr Chart Above. The 4hr chart of Bitcoin reveals the overall sell-off from 2019 high at ~$13800. The current pattern in play is called a double zigzag, which is a counter-trend price move. The price has already completed the first a-b-c zigzag in wave W in green, and a corrective recovery zigzag in wave X in green. Price is currently making the second a-b-c zigzag, and it has only completed impulse wave ((a)) labeled (i)-(ii)-(iii)-(iv)-(v), corrective recovery in ((b)) is unfolding, the completion of wave ((b)) will set the stage for a five-wave decline in wave ((c)) to complete the second zigzag in wave Y.
One of the characteristics of double zigzag (W-X-Y) is that wave Y has the potential to equal wave W or extend up to 1.618 of W. For this to correct, the price has the potential to decline to as low as ~$6600. Besides, if my overall wave count is correct, the current pullback is part of intermediate wave (2). And according to Elliot Wave theory, wave (2) has the potential to retrace 50%, 61.8%, and 78.6% of the impulse move. For Bitcoin, 61.8% lies within ~$7200. There are also clusters of support around $7500 area.
Verdict Bitcoin has been amazing crypto in 2019 so far, but considering all the Elliot Wave facts above, it’s not advisable to buy Bitcoin now. The bulls may end up with another ~30% loss to around $7500 from near current levels.
Do you think Bitcoin correction is already completed? Let me know your thoughts in the comment!