Analyzing Which is the Most Likely Bitcoin (BTC) Wave Count?

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In this article, BeInCrypto will take a look at the potential wave count for Bitcoin (BTC), after the sharp fall of Dec 4.

Long-term BTC counts

The main wave count suggests that BTC is in wave five (white) of a five wave bullish impulse. A bullish impulse is a five wave movement, in which three waves are upwards, while two are downwards, and are considered corrective.

Therefore, this is the final upward movement prior to a significant correction. The entire upward movement began on Dec 2018, when the BTC price was at $3,122.

The sub-wave count is given in yellow, and shows that BTC is still in sub-wave two (yellow). Therefore, if the count is correct, there is still considerable room for the price to grow. 

The only issue with this count is the fact that the trendline connecting waves 2 and 4 is nearly broken (red circle). According to Elliott wave theory, the trendline should stay in place for as long as the upward movement is intact.

Therefore, for the count to remain valid, BTC has to reclaim this trendline and stay above it.

BTC Count
Chart By TradingView

The alternate count, which is more bearish, suggests that BTC is still in wave four of the same five wave upward movement (white). In this case, it would continue the decrease towards $30,000, before eventually beginning another upward movement towards a new all-time high, which would complete the bullish impulse.

The only issue with this count is the large discrepancy between sub-wave two and four (highlighted). While they should have some alternation between them, the fact that sub-wave four is nearly seven times longer than sub-wave two is extremely unusual.

BTC Alternate count
Chart By TradingView

Short-term count

Cryptocurrency trader @TheTradingHubb outlined a BTC chart, which shows the price correcting towards $42,000.

BTC Count
Source: Twitter

Since the tweet, BTC reached the target and bounced. However, due to the length of the preceding increase, it does not seem likely that the entire corrective structure is complete. Rather, this could be only the first part of the correction prior to another drop (black). 

In order for the bullish count to remain valid, BTC has to hold on above the $37,100 area. This is the 0.786 Fib retracement support level and a horizontal support area. 

A decrease below it would make the previously outlined bearish count as more likely.

BTC Count
Chart By TradingView

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona graduate school of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst.

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