BTCUSD: Elliott Wave Structure of October 2021 Rally

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Here is my current view of the wave structure of the rally since the September 2021 correction. That correction was either a second wave, or possibly a fourth wave, of the rally from the 29k bottom of the 2021 Spring "crash". The decision between 2nd and 4th depends on a definitive decision for the end of the correction from May to July. I believe most analysts use the July 20 low as the end of the correction, and count the September high as the top of the first wave. Accordingly, the current rally of October is a third wave, and should proceed in a powerful manner far beyond the all-time high of April. But this should hold true even for a fifth wave, in case that assignment needs to be made at some point with more data at hand.

The October Fest rally of 2021 actually started in September, like any good October Fest, with an initial first wave on 9/21 from c. 39,500 USD, Its second wave was completed on 9/28, in a dual peak formation, here counted as a flat A-B-C structure. There is some concern that it may actually be a sequence of two 1/2 pairs, but this cannot be decided just yet. We have to see whether an extra wave 3/4 combination can form in the near future, that cannot be accounted for any other way. For the present purpose and until better evidence, I am inclined to stick with my current count. In any event, this took the price higher only by about a thousand points to the low of wave two. From there on a five wave rally ensued for the third wave to a high of about 57,850 on Oct. 11, exceeding the high before the September correction. This third wave ended very near the 2.618 logarithmic Fibonacci extension of wave one, a very common size for third waves.

Since that high, a sharp and vicious fourth wave spiked downward to below 54,000. At this time we are waiting for confirmation of the end of this correction and the start of a new rally in the fifth wave of this bull market.
Comment: BTCUSD is back in contention to make a new high, as it has been sighted above 57,000 again, after a strong rally of over 3000 points in just eight hours or so. Currently in a third wave of small degree, it should come close in the fifth wave.
Comment: We are just waiting for the completion of this leg up in a fifth wave, before some pullback once again.
The market is at 57330 currently, past the 3.0 log. Fib extension of wave one in smallest degree since the correction, but still ahead of the 1.272 extension (57.6k) of the next largest wave one. I think other reasonable targets could be as high as 58.0 (1.414) or even 58.6k (1.618). This will complete wave 3 of the largest degree since correction.
Comment: So, the 1.618 target for 58.6k was pretty close to where the market went. It reached a little over 58.5k. Good job, market. It is in the middle of the heavy resistance from not only chart history, but on-chain data. Considering, it has done rather well, but we should expect just a little more struggle, I would think. Prices will probably accelerate in the upper region from 60k.
Distribution has been light in the recent pullback to 54k, and the mean coin age has made new highs. The public has still to enter the market in significant FOMO-type fashion, since there is very little Crypto news or reporting in the media. A new ATH might wake them up. The miners are mostly accumulating, and the US has now become the largest base, since the Chinese have relocated their operations there and have restarted to mine coins. The hash rate has been increasing steadily. All very bullish signs for the rest of the year and probably some time into 2022.
Comment: BTCUSD 60,000.

A milestone for this leg. The market is trading past the all-time high monthly closing price (58.8k), and is looking for more. The advance through 59k was less contested than I thought. Breaking 60k with a couple of attempts should set the market up for a challenge of the existing ATH.
Comment: I believe the market is trading in a fifth wave since the recent low of 53.9k. Of this fifth wave, wave three produced the first 60k print (60,000 on Bitstamp, a little higher or lower on other exchanges), That followed a pullback this morning to support at 58.8k (the ATH monthly close). We have to see how much upside this fifth of fifth still has, and whether that's enough for a new ATH. Probably not before some correction, but it can always extend. The fifth wave started with a pair of waves that could easily be interpreted as two 1-2 sequences, promising a large leg up.
Comment: BTCUSD 61,000.

Anticipation of an approval of a Bitcoin ETF may drive price before the actual event. Any sell-the-news effect will likely be limited and short-lived. The goal has to be the ATH at this point, and a correction after wave five is coming in any event.
Comment: 61,255 was the 1.618 extension of wave 1 in wave 5. Next target 2.000 = 62,350.
Comment: BTCUSD 61.8+k: Valkyrie ETF Trust II approved by Nasdaq, supporting immediate acceleration of registration with the SEC.
Comment: I was about to write that this fifth wave is far from finished. ... POP


It should run to the ATH.
The subwaves are still unfinished.
Comment: Well, perhaps a little more correction is needed... The wave count may not be so clear after all.
Comment: If BTCUSD can maintain a price of over 60,000--actually 21 dollars less--it will have established a new all-time high weekly closing price. The previous mark was set on April 5.

The area between the existing ATH monthly close and the ATH weekly close has turned from a resistance to a support zone. This area was the extent of the correction of lesser wave degree on October 15, and provided support in the sharp wave C decline this afternoon, dropping over 2000 points in a matter of minutes.

After some back-and-forth, I have settled on the following wave count of the last rally and this weekend's correction. The depth of the correction finally convinced me that last week's rally was a first wave, and the weekend correction its second wave, labeled wave i and ii.

If the assignment is correct, the third wave should take out the ATH in the next few days.

Comment: The bull market is still young, and the rally only in its infancy. Breaking the all-time high should accelerate prices and get the public more involved. So far, most of the advance from 29k has been from Whales and long-time holders buying every dip they can. The mean coin age is steadily rising. All technical internals of this market, from price to on-chain data, exchange data, funding rates, miner hash rates has been bullish. It was clear all along that the Spring "Crash" was a technical correction, never a bear market.
Comment: Speaking of "acceleration"... The first impulse out the bottom of wave ii (assigned per my last chart) was a 2700 point impulse achieved in about three hours on small time scale.

This is a third wave and Prechter writes about them: "Third waves are wonders to behold. They are strong and broad, and the trend at this point is unmistakable..."

By today's metric, the market is only another few hours away from a new ATH.

But what goes up fast can come down even faster... The wave count is 5 of that impulse, and a deep correction can threaten a new ATH weekly close.
Comment: Not this time.
BTCUSD 62,470
Comment: It is useful to look at the bigger picture.

The first ATH value has been set: Weekly close.
Comment: Why would anyone try to short the trend, when the trend is your friend. The trend is unbroken since the COVID crash.
Comment: Tonight's rally has finally broken its trend line, and gone into its consolidation phase after five waves up. The third wave was doubly extended with a length of almost 3 times the size of one, and the fifth wave was larger by 1.414, a level which is confluent with 4.00 of 1 measured from the end of wave two.
Overall a move of 3700 points, from 58.9k to 62.6k.

The correction of this move might be steep, could go to 60.3k, the 61.8% retracement level (log), but I doubt it will reach this.
Comment: The market retreated to 60.6k (so far), a little past the 50% level. Had it not been for a new local high in the B-wave, it might have gone to 60.3k. It is an expanded flat.
Comment: The volatility in this market is only growing and this will continue for the next weeks and months.

So, the correction finally produced another spike downward beyond the 61.8% level I quoted. It was our new green zone that stopped it, with a reject at the old ATH weekly close, just below 60,000.
Within minutes after this last push down, the price catapulted back up by 1700 points to 61,600. This should be another third wave (of one higher degree) and we will see where it leads. Waiting to take some measurements once prices settle down a little and internal wave structure can be seen.

Comment: BTCUSD back at 62,000. Exactly.
Comment: All this should flush out some of the leverage, OI has been increasing.
Comment: It looks like the price behavior with these large swings of the last couple days may be a large triangle formation, as indicated in this chart.

It should not be a straight triangle, but part of a WXY combination. A triangle can only occur in the last position of a combination, so the correction should be coming to an end pretty soon. Currently, it may be in the D wave or already in the E-wave.
Interior labels may still need additional adjustments for the various three-waves.
Comment: The alternative, which I had been pursuing so far, are a series of first and second waves, but this got suspicious pretty soon.

Also note that the data source for this chart (BITSTAMP) has these sharp spikes once a while. There was one over the weekend, IIRC, and another one today, a single wick deep down into the green zone. These must be causing a lot of problems for traders with stops. This does not show up in other exchange data.
Comment: Although this idea of a triangle seems completed now, I can also make arguments for a diagonal, based on the action thereafter. It could even be an ending diagonal, I think, which would call for a larger correction.
Price has been pushing higher, even with a new high, but it doesn't look impulsive this morning. ATH is less than 2000 points away from that new high, a healthy third wave would take it out. Of course, the resistance here is maximal.
Comment: BTCUSD 63,300
Comment: Caution is in order here...
Comment: Indeed...2000 point drop.
Comment: This looks more and more like a diagonal with four waves completed. The fifth wave could shoot up very high, and be retraced very deep.
Comment: Coinbase Pro has a sell wall at 65000, and one also pops up intermittently on Binance. They also put one up at 63.5 and 64.0. All probably very fake.
Comment: BTCUSD 64000
Comment: BTCUSD 64,500.

It is like a countdown now. 500 points to go.

I am counting the last wave up as an extended wave (1-2, 1-2) because the sizes don't match up otherwise, a third wave cannot be the shortest wave of an impulse.

Comment: After the ATH is broken, I am looking for completion of a fifth wave, and then a decent retracement.