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Bitcoin: Will It Correct Back To $40,000 Before Making Another Upward Trek?

By Dr. Arnout ter Schure CryptocurrencyApr 30, 2021 04:07PM ET
www.investing.com/analysis/bitcoin-will-it-correct-back-to-40000-before-making-another-upward-trek-200576750
Bitcoin: Will It Correct Back To $40,000 Before Making Another Upward Trek?
By Dr. Arnout ter Schure   |  Apr 30, 2021 04:07PM ET
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Bitcoin has essentially not gone anywhere since late February. So what is going on?

Using the Elliott Wave Principle (EWP) combined with technical analysis, we can see that BTC has likely been in an irregular flat correction since hitting its late February top.

Flat corrections consist of three larger waves: one wave down (a), followed by one wave one up (b), and a subsequent wave down (c). They are called “flat” because the instrument is essentially mainly moving sideways. It is a typical side-ways consolidation pattern after a long runup, which shows buyers are still in control, but some profit-taking is taking place before the next runup kicks in.

In addition, waves a, b, and c, of a flat are made up of smaller waves as well: wave-a consists of three waves, wave-b as well, but wave-c consists of 5 waves. Thus, in more detail, after the runup peaks, often a strong 3rd of a 3rd wave, the instrument will see a 3-3-5 move.

Let’s put this EWP to the test. See figure 1 below.

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

Bitcoin Daily Chart With EWP And Technical Indicators.
Bitcoin Daily Chart With EWP And Technical Indicators.

Bitcoin topped in mid-February, declined into late-February, then rallied into mid-April. Besides the last week, it has been falling since. Thus, this describes a down-wave followed by an up-wave and now in another down wave. The first decline (red wave-a) consisted of three smaller waves: green waves a, b, c. From late February into mid-April, the rally comprised three waves: green a, b, c. With the internals of those waves matching typical Fibonacci-extensions. The mid-April all-time high was 1.382x the length of the February decline, a special relationship between wave-a and wave-b in an irregular flat.

The subsequent recent decline to around $47,000s consisted of five (grey) smaller waves. Thus, for now, there’s been a 3-3-5 move since the late February high. This means two things: either the flat correction is over, and a run to new ATHs 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 $60000 +/- 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+.

Bottom line: Since financial markets are all about the possibilities of probabilities, Bitcoin is at a crossroads. It can decide to rally a little more before declining to the $40,000 region, but possibly as low as the $30,000 level. Or, it chooses to rally rather directly to new ATHs. We will know over the next few days which it is. Either option will be a great buying opportunity, so 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.

Bitcoin: Will It Correct Back To $40,000 Before Making Another Upward Trek?
 

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Bitcoin: Will It Correct Back To $40,000 Before Making Another Upward Trek?

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Comments (11)
Quy Nguyen
Quy Nguyen May 04, 2021 9:02PM ET
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Thanks DR. I just bought a new house 🏠 by following your analysis. you are absolutely awesome 👌
Gene Kret
Gene Kret May 01, 2021 11:30AM ET
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Nice! What else does your crystal ball say Doc? Buy TSLA 🚀
Stephen Fa
Stephen Fa May 01, 2021 9:41AM ET
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Fundamentally, Bitcoin is the new gold. It going higher as the US and EU governments head towards sovereign debt and currency disasters eventually. Like gold, Bitcoin can be volatile.
TL Chan
TL Chan May 01, 2021 9:35AM ET
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yes, wasting time on another fiat rubbish!
Murali Brahmandam
Murali Brahmandam May 01, 2021 7:00AM ET
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it will correct to 40k before going towards zero
BTC price reminder
BTCpricereminder May 01, 2021 6:22AM ET
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I don't think it will go back to 40 k. correction has been already  done.
Kristine Castro
Kristine Castro May 01, 2021 2:00AM ET
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how to withdraw my money
Benjamin McIntire
Benjamin McIntire May 01, 2021 1:50AM ET
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I have some snake oil to sell
Ninasix Popast
Ninasix Popast May 01, 2021 1:50AM ET
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Hello
Leon Kelly
Leon Kelly Apr 30, 2021 10:04PM ET
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Come now Dr. arnout, you know we want NDX information. Is go away may in affect?
Andrew Bevan
Andrew Bevan Apr 30, 2021 10:04PM ET
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I think his predictions regarding the NDX have been rather stellar and reached their expectations, while over indices I was following simply distributed sideways, which must have been a disappointment for some, in view of the strong result season. Sell in May may gain some collective momentum, if people were looking for hitting a top and exiting at this particular time.
Leon Kelly
Leon Kelly Apr 30, 2021 10:04PM ET
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Kanok C.
Kanok C. Apr 30, 2021 8:07PM ET
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no no no... correction will finish at USD 0.40
Fruhan Griffon
Fruhan Apr 30, 2021 4:23PM ET
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BTC will set new highs in May. Then Johnny EW will come back with another wave theory. Elliot Wave is the Monday morning quarterback of technical trading. Useless at prognosticating yet beautiful at telling wave stories after the fact.
Dr. Arnout ter Schure
Dr. Arnout ter Schure Apr 30, 2021 4:23PM ET
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If you’d taken the time to read my articles you would realize how often I have been able to correctly forecast the path stock markets, individual stocks and crypto currencies would take over the coming days, weeks and months. Alas, often folks confuse their own limited understanding and unwillingness to learn comprehensively with something that supposedly then doesn’t work. As usual the blame lies with others, but not their own -unecessarily- limited (mental!?) capacity.
Edward Chong
Edward Chong Apr 30, 2021 4:23PM ET
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yes so true with only 96 followers :)
Fruhan Griffon
Fruhan Apr 30, 2021 4:23PM ET
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Dr. Arnout ter Schure  Your an amatuer and this article is click bait. It's not comprehensive enough. Where's the other indicators that form a more robust analysis ? ·       Sentiment Analysis ·       Market Breadth ·       Weight of the Evidence Approach ·       Cycle Analyses If you are as successful as you claim then why waste time authoring click bait when you could be sailing on a yacht that market prediction money bought you ?
Dr. Arnout ter Schure
Dr. Arnout ter Schure Apr 30, 2021 4:23PM ET
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Fruhan Griffon  another useless comment. Given I write the articles and you only get to respond means you are an amateur. Why don't you become an author with https://investing.com? They only hire pros. Since you are not an author you are thus an amateur. Not me. Step aside. I don't see why my article is clickbait, as there's nothing to click on in my article other than to an educational section about the EWP... Maybe read it and learn something?!? Market breadth?!? Why? There's no "market breadth" in BTC because there's only 1 item traded... BTC... All the rest is interesting but would lead to a 10-page report I can't get published here. Oh and btw, look where BTC is now... Green path... Lastly, I don't see why my personal finances are of importance as you have no idea about my personal wealth. Takes millions to make millions. And if I don't have millions it will take a while to make them...
 
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