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Bitcoin: Complex Correction To Low $40K Most Likely In Play

By Dr. Arnout ter Schure CryptocurrencyMay 14, 2021 02:35PM ET
www.investing.com/analysis/bitcoin-complex-correction-to-low-40k-most-likely-in-play-200580222
Bitcoin: Complex Correction To Low $40K Most Likely In Play
By Dr. Arnout ter Schure   |  May 14, 2021 02:35PM ET
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In my update about Bitcoin from two weeks ago, I concluded:

“Now may be a good time to be patient and let the market tell us where and when to place a low-risk, high-reward trade.” Because “using the Elliott Wave Principle (EWP) combined with technical analysis, there has been a 3-3-5 [waves] move since the late February high. This means two things: … a run to new all-time highs is under way (red path). Or, these smaller five waves are only the start of a more extensive five-wave down sequence (green route). How do we know which option is operable? Simple: If the price of BTC stalls at around $60,000 +/- 1000 and then starts to decline, the green path is operable. But if the price continues to rally past the upper end (>$61K), then the red course is most likely, and BTC should be on its way to $90K+.

What has happened since then?

First, Bitcoin stalled in the ideal (red) bounce target zone (at $59,587 to be exact vs. my $60K+/-1K forecast).

Second, it revolved around its 50-day simple moving average for most of the time. It appeared investors were waiting for a catalyst to determine the outlined red path vs. green path. On Wednesday, Tesla (NASDAQ:TSLA) suspended vehicle purchases using Bitcoin. There was the trigger, and BTC dropped to as low as $47,000. The red path was negated. Remember, markets are all about probabilities of possibilities, and when one door closes, another one opens.

Here I would like to focus on the green path, as shown in Figure 1 below.

Figure 1. Daily Bitcoin candlestick chart, with EWP count and technical indicators

Bitcoin Daily Chart.
Bitcoin Daily Chart.

Although I do not have enough price information, given the anticipated short-term rally (green arrow to “2?”) was correct in time and price, I continue to view the current decline as part of an ending diagonal (grey downward pointing arrows) until proven otherwise. Diagonals, or wedges, are terminal patterns: in this case, red intermediate wave-c of black major wave-4. Once a diagonal completes, the rally coming out of it will be swift. In this case, a major wave 5. Unfortunately, ending diagonals are often complex overlapping price structures. Thus, for now, I view green minor wave-3 is under way, subdividing into smaller waves. If BTC stays below $55,100, this is the most viable option.

Bottom line: For now, Bitcoin took the green path as outlined two weeks ago. Therefore, I continue to anticipate a complex price move down to the low $40,000s before the next more significant rally to as high as $90,000+ starts. I will have to change my point of view when BTC rallies back above $59,000 from current levels with a severe warning to the bears on a rally back above $55,100.

Bitcoin: Complex Correction To Low $40K Most Likely In Play
 

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Bitcoin: Complex Correction To Low $40K Most Likely In Play

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Comments (18)
Darko Birtic
Darko Birtic May 21, 2021 4:54AM ET
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Dr. Arnout, congratulations, your prediction from May 1 that it could touch the 30k level was impressive. Are we on green wave 4 (up to previous support at 48k) before green wave 5 (I would say possible down to 28k level) which is still possible in my opinion or is the bull run starting? Your opinion at this point in time would be greatly appreciated.
Momentum Tradarn
Momentum Tradarn May 21, 2021 4:54AM ET
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Subscribe to get dayly updates from him.
Dr. Arnout ter Schure
Dr. Arnout ter Schure May 21, 2021 4:54AM ET
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Momentum Tradarn i could nor have said it any better ;-)
Kelly Brimmer
Kelly Brimmer May 17, 2021 8:57PM ET
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In your previous article you mentioned possibly 30,000 before turning higher. Based upon bitcoin around 42-43k today are we close or do you feel we have to go down further? I appreciate you insight and understand nothing is guaranteed.
Kelly Brimmer
Kelly Brimmer May 17, 2021 8:57PM ET
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Looks like i got my answer this weekend. Since you nailed it i assume this is now a great entry point to buy. Very impressive with your numbers! Could not have been more dead on! Thanks
Dr. Arnout ter Schure
Dr. Arnout ter Schure May 17, 2021 8:57PM ET
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Kelly Brimmer there you have it! U r welcome.
Andrew Bevan
Andrew Bevan May 17, 2021 11:05AM ET
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Yes, your prostignates have been impressive. I have you receive due credit. 👍
Momentum Tradarn
Momentum Tradarn May 16, 2021 3:36PM ET
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The anticipated path evolves beautifully so far!
Dr. Arnout ter Schure
Dr. Arnout ter Schure May 16, 2021 3:36PM ET
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Thank you!
Xulzay Roix
Xulzay Roix May 16, 2021 7:47AM ET
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$20k level retest 🙄
Aldo Rebollo
Aldo Rebollo May 15, 2021 11:30PM ET
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most people think it will disappear, I believe it will embrace it's price much higher by the end of this year.
Ogbonna Ahamefula
Ogbonna Ahamefula May 15, 2021 8:21PM ET
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please Dr.Arno but ter schure am new into this BTC investment I need a mentor to carry me along.
Mohamed Kuoroumah
Mohamed Kuoroumah May 15, 2021 7:47PM ET
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how are you my friend how are you are you okay
snn snn
snn snn May 15, 2021 3:32PM ET
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How I can start
Dr. Arnout ter Schure
Dr. Arnout ter Schure May 15, 2021 3:32PM ET
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You can start by becoming a premium crypto trading member. See website link in Figure 1.
snn snn
snn snn May 15, 2021 3:32PM ET
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I am new to the market and need to learn more
alex gallegos
alex gallegos May 15, 2021 3:32PM ET
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Your first lesson is to ignore crystal balls. 🔮 Next is to stay away from cryptocurrency.
Kevin Avila
Kevin Avila May 15, 2021 2:47PM ET
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Trash
Lou Vlp
Lou Vlp May 15, 2021 8:12AM ET
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Great analysis Dr. Arnout
Larry DeAngelis
Larry DeAngelis May 15, 2021 7:35AM ET
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Charles you summarized perfectly the uselessness of the Elliott Wave for a trader!
Charles Leeson
Charles Leeson May 15, 2021 6:48AM ET
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To summarize the article and save everyone time, it looks like it could down but possibly, maybe, it will go up. IDK
Dr. Arnout ter Schure
Dr. Arnout ter Schure May 15, 2021 6:48AM ET
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The classic reply of somebody who A) cannot read comprehensively, B) cannot understand a simple phases such as “most likely” in the title, C) thus does not understand the concept of probabilities of possibility, D) therefore falsely thinks financial markets are an absolute certainty. Hence, why such persons will only negatively comment on articles they cannot understand and will never be an author of an article. But then again, for every winner there is a loser. Such is life. Moving on.
Việt Ông Văn
Việt Ông Văn May 15, 2021 4:33AM ET
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Thanks. Let's see what happen next.
Jozsef Bakos
Jozsef Bakos May 15, 2021 1:06AM ET
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Congratulations to Dr. Arnout ter Schure for her analysis of the previous excellent bitcoin!
cran Vivid
cran Vivid May 14, 2021 2:47PM ET
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I see that low 40k idea pops up more and more...i have only one problem: more people start to develop same price target less likely its going to happen...we shall see. I am sitting tight with my stablecoin
Andrew Bevan
Andrew Bevan May 14, 2021 2:47PM ET
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We have the same ideas in my field. If you want to study dolphins in their natural habitat, as soon as you get too near...
Andrew Bevan
Andrew Bevan May 14, 2021 2:40PM ET
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I think EW is genius. Even though the future isn't cut out in stone, it's like trying to understand the bounces of an elastic band. Thank you for your analysis and keep pushing them! 👍
 
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