Bitcoin Bulls Fumbled the Ball: Is $90k Still Attainable?

In my last several updates for you, I was looking for Bitcoin (BTC) to drop to $54-60K and then stage a rally. It fell to $53,332 on November 28 and rallied to $59,226 two days later. But, as I stated:

• “If yesterday’s low [$53,332] holds, BTC can stage a rally to possibly as high as $105-110K” and;
• “The reversal of yesterday’s low followed by a daily close >$60K will likely mean a new rally to ATHs is underway.”

So what happened? BTC did not rally >$60K, thus triggering a low-risk long entry. Instead, that significant $53,332 low, which my premium crypto trading members could use as a suggested stop loss level, already gave way on December 3. Bitcoin then cratered to as low as $42442 a day later, preventing a considerable amount of additional pain. That’s what stops are for as losing trades are part of the game, but that is also the risk of being more aggressive, i.e., trying to capture more of a potential move.

The current correction is longer in time and more profound in price than the preferred Elliott Wave Principle count I was tracking and even more than the alternative count displayed in Figure 1 of my previous update. As such, the Bulls may have fumbled the ball. Therefore, my statement in my November 2^nd update (see here), “BTC will have to break below $46K to suggest something much more bearish is afoot. This option, albeit possible, is not my preferred path.” must be brought back to our attention.

Figure 1. Bitcoin weekly chart with detailed EWP count and technical indicators.

The rally since the summer lows was already suspect.

Although everything was lining up for the next rally (indicators, sentiment, etc.) last week, we knew the $53,3K level had to hold. BTC also had to rally >$60K because I found “the possible intermediate wave-i rally from the mid-September lows into the mid-October highs, was longer in price than the rally from the June/July lows into the early-September highs (major wave-1).

Since the intermediate wave degree is smaller than the major wave degree, it is odd that the former is longer than the latter. As such, we must be cognizant of the alternate option annotated on the chart in that BTC is in a more significant ending diagonal (primary-V) wave...”

Given the above-mentioned “even deeper drop than the alternative count displayed in [last week’s] Figure 1,” I must entertain the thought that a giant 3^rd wave has topped: blue Primary III. Namely, using weekly down candles to quantify corrective waves, the rally since the June lows can be counted as having completed five waves up. See Figure 1 above. If correct, then Primary IV is now underway before V takes hold and does rally BTC back to $90K+. It is simply taking a “detour,” in this case.

Typically 4^th waves retrace 23.60-38.20% of the prior, same degree, 3^rd wave, but please note how (black) major-4 retraced between 50-62%. Thus, if we assume the same retrace for this possible (!) wave-IV, then we should expect a low between $28-36K. From there, Primary-V can then take hold. For now, BTC is holding the 38.20% retrace level for possibly bounce setup.

Bottom line: Bitcoin failed to rally above $60K and failed to hold the critical $53.3K level and, as such, tumbled lower to the low $40Ks. This flash crash opened a can of worms, which I already warned about in early November, and which my premium crypto trading members were aware of: forewarned is forearmed as they say. So no real surprises there.

If anything, this week showed why having stops in place is so crucial and how the EWP can help identify these critical (support) levels. Now the BTC bulls are in a pickle and may have to wait a while before $90K+ is reached. Although there’s still one more door left to crawl through to attain those highs more directly, it’s like threading a needle, and I am not yet ready to disclose it as too little price data is available to support that options more rigorously.