Bitcoin (BTC) Elliott Wave Analysis: Rejection At All Time High

BTC Price Analysis

The price of Bitcoin (BTC) reached an all-time high of $108,300 on Dec. 17 which marked the completion of its wave 3 from a five-wave impulse that started in September. As such we saw a downturn as the price entered a correction stage. If our previous assumption is true, the downturn in question is wave 4 and serves to consolidate the price sideways before its next and potentially final upward advancement. 

On Jan. 13 the price fell to around $89,000, decreasing by 17.34% since the all-time high. We saw a three-wave move resembling an ABC correction which makes this point a likely one for the completion of the corrective stage. 

An uptrend began, further hinting at more upside continuation as the corrective stage ended, but BTC showed signs of weakness at an all-time high. On Jan. 20 it revisited the $108,000 area making a slight increase to $109,300 above its December peak. 

However, it quickly got rejected sending it back to $100,200 on the next day. Currently, the price hovering around $102,272, consolidating below the all-time high and above the prior low. The 4h chart Relative Strength Index is sitting at neutral territory leaving equal room for further upside as it has for the decline. 

In all, BTC sits between two potentilla scenarios. Either we’ve seen the start of the new impulse wave from Jan. 13 whose development is in progress or the prior rise is still part of the corrective wave 4. As the price consolidates its next move will determine the next likely outlook. 

BTC Price Prediction 

Zooming into the hourly chart we can see that BTC could have finished its first sub-wave of the lower-degree five-wave impulse. That means that the decline from Jan. 20 could be its second sub-wave offering to correct the price before the next strong bullish momentum runup. 

If this is true, BTC should keep trading above $100,000 although this possibility shouldn’t get entirely invalidated according to Elliott Wave unless it falls below its Jan. 13 low. But if it does so, the likelihood of the second, bearish scenario will look more likely.  

In the bearish scenario the rise from Jan. 13 to 20 was the second sub-wave, also called the connector in a larger complex correction count. The first sub-wave is an ABC pattern while the wave W of a higher degree count while the following rise is the wave X to its $109,300 high. 

Should the price of Bitcoin continue falling below $100,000 that could mean that its wave Y is developing and with it the last sub-wave in the higher degree wave 4. Our target would be set at a lower low of $85,200 on the 0.382 Fibonacci level. 

But if BTC finds support above $90,000 at max and starts showing bullishness a breakout will be expected above its all-time high and on to a new one. Wave 3 will push the price to an optimal target of $130,630 as projected by the 1.618 Fib extension.