The Bitcoin price has been decreasing since reaching a high of $13,790 on June 26, 2019. When looking at the all-time Bitcoin price action, the possibility arises that this is the Y wave in an extended W-X-Y correction.
In relation to the all-time high reached in December 2017, the June 2019 high is just another higher-low, which suggests that the price is still mired in a long-term downward trend.
This possibility was outlined by cryptocurrency analyst and trader @CryptoCapo_, who tweeted a chart with what he believes is likely to be the future movement. According to Capo, the price is on the process of completing a W-X-Y correction, currently being at the final wave of the larger Y wave.
The most likely area for the end of this wave is given at $2,800-$3,100, while another possible target is between $2,000-$2,200.
The W-X-Y correction often transpires after the price has completed a five-wave Elliott formation. We have outlined the possible wave count to this point in the image below.
The main issue with this possibility is the time periods. While the entire upward move took 2,709 days to develop, we are currently in day 847 of the correction. Since the price is predicted to be in the final wave of this formation, an upward limit for the correction could last between 1,000-1,200 days. While the time periods for an upward move and correction do not have to be identical, the difference in time is quite substantial.
Even if we count one-by-one, the upwards and downwards waves in the five-wave formation, took more than 500 days to develop, compared to about 300 days in the W-X-Y correction. This raises some doubts about this possible pattern.
‘A-B-C’ vs ‘W-X-Y’
The main difference between a regular A-B-C correction and a W-X-Y is the sub-wave count. While the A-B-C formation often has a 5-3-5 or 3-3-5 wave count, every wave in the W-X-Y correction consists of three sub-waves, amounting to a 3-3-3 correction.
Since the W and Y waves often have the same length, this correction could end in July 2020.
There are three main areas that could act as the bottom and reverse the price:
Out of these three possibilities, the likeliest place for the wave to end would be $2,100. The decrease from the top of the W wave to the top of the X wave was 39.41%. It would make sense for the decrease from the bottom of the W wave to the bottom of the Y wave to be similar since the W and Y waves often have the same length.
As for the other two support areas, the $2,800 level seems to close to the current W bottom, while the $1,000 level would call for a longer-term correction and a very extended Y wave. While it is not impossible, the price would have to break down below significant support areas to reach it.
To conclude, the BTC price is possibly nearing the end of a W-X-Y correction that has been transpiring since the price reached an all-time high in December 2017. The likeliest place for the correction to end would be between $2000-$2200, possibly being completed in July 2020.