Bitcoin Gunning for $28000?

Bitcoin Broke Above $18344, Triggering a Bull Run

Although I preferred to look lower, in early December last year, I found using the Elliott Wave Principle (EWP), “Bitcoin must break above $18185 and then above $21475 to tell us the downside has already been completed in a rather unorthodox fashion.” See here. On December 14, it traded as high as $18344, thus giving the Bears the first warning as that rally comprised five (grey) waves.

See Figure 1 below. It then pulled back in three waves and staged a rally breaking above the December 14 high. That was the trigger for my premium subscribers to go long as it would produce a rally to at least the mid-20,000s.

Ending Diagonal Invalidated – Tracking an Impulse higher

In my last update, I stated, “The price action since the August high has been overlapping, e.g., the recent stab above $18185, but no daily close above it. As such, the interpretation of it becomes more difficult, but it appears an ending diagonal (ED) 5^th wave is forming. Unless the Bulls can get BTC’s price back above the December high ($18344) followed by a break above the August high at $21475.”

The Bulls did what they had to do, and now the most likely path forward is an extended impulse higher. Extended means the 3^rd and 5^th wave targets are beyond the typical 1.618x 1 and 2.000x 1 levels, respectively. Here we are looking at 2.618x 1 and 3.000x 1 instead, respectively. See the blue target zone boxes in Figure 1. Shorter-term, orange W-4 of grey W-iii should have bottomed, right in its ideal orange target zone, and orange W-5 to ideally $22750-24000 is underway before grey W-iv, etc., take hold.

The ultimate and ideal upside target is $27-28,000 for the current rally. At the $28K level, BTC can decide if that was all for an irregular expanded flat (black) wave-4, which would explain the three-wave decline from the August high into the November low very well. Or if it is only wave-1/a.

The former means the $10K level will get visited for all of W-5, whereas the latter suggests BTC will pull back to $20-18.5K before moving higher again for W-3/c. We will deal with that question when we get to $27-28K. For now, as long as $18344 holds, with a first warning for the Bulls below $19200, we can look for higher prices.