Bitcoin (BTC) has been decreasing significantly since reaching a high on Jan. 8.
It’s likely that Bitcoin has completed wave 3 and has now begun a correction.
Primary Bitcoin Wave Count
In BeInCrypto’s previous wave count article, we stated that
“Bitcoin is in wave 5 (white) of this cycle wave. A likely target for the top of the move is found between $40,602-$44,127.”
Yesterday’s movement makes it likely that wave 5 (white) is complete. This would also complete cycle wave 3 (red) in the process.
If BTC is now in a bearish cycle wave 4, the three most likely targets for the correction to end would be found at:
- $27,481 – 0.382 Fib retracement
- $22,969 – 0.5 Fib retracement
- $18,457 – 0.618 Fib retracement
Out of these three, the most likely to act as the bottom would be the $18,457 (0.618 Fib) area, since it was the same level that wave 4 (white) completed.
Very often, waves of a higher degree terminate at the same place as one degree lower. This would be the case if BTC falls to $18,457.
Furthermore, this decrease would also serve to complete a fourth wave pullback, making this a very likely target to be reached.
Alternate BTC Count
The alternate count would suggest that BTC has just completed wave 3 and begun wave 4 (white).
The three most likely targets for the bottom of wave 4 are:
- $29,667 – 0.382 Fib retracement
- $25,874 – 0.5 Fib retracement
- $22,081 – 0.618 Fib retracement
In this scenario, BTC would be expected to initiate another upward move and reach a high between $48,858-$52,937.
Using the same fourth wave pullback scenario, the most likely target for a bottom is the 0.5 Fib retracement level at $25,874.
Cryptocurrency trader @CryptoTony_ outlined a BTC count, in which the price reaches a bottom near $35,450 and begins an upward move. However, this count has been invalidated since BTC already reached a lower low.
The movement since the Jan. 8 high does look like the beginning of a new bearish impulse (highlighted in red),
Despite the multiple long lower wicks, the movement looks bearish seeing as BTC has not managed to create a higher low.
The only alternative in which the upward move continues is if this is just minor sub-wave 1 of sub-wave 5 (orange).
However, if that were the case, BTC would go much higher. This would further extend the current rally, which is already overextended, making this possibility unlikely.
It’s possible that Bitcoin has completed a bullish trend that began in March and will now correct toward the targets between $18,451 and $27,480.
The alternate count suggests that a bottom near $25,000 will be reached while the primary count estimates that BTC will move lower toward $18,451.
Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.