Is Bitcoin Still a Good Buy?

The Diagonal is Dead; Long live the Impulse

Spoiler alert: the answer is yes. For those new to our updates and as a reminder to regular readers, we have been bullish on Bitcoin (BTCUSD) since at least mid-September last year. See here. So, the question is whether buying BTC now is too late. Although many factors go into this decision, such as expected hold time, expected gains, risk, etc., We don’t want to buy uninformed, when risk is high, etc., and this is where our preferred method of analyses, the Elliott Wave Principle (EWP), comes into play.

We have been tracking an “Ending Diagonal” price structure from the August 5^th low that moves higher. In our last update, we expected Bitcoin to “ideally reach $74.8-78.4K, possibly as high as $82K on any unforeseeable wave extensions”. Fast forward, and Bitcoin is now trading at almost $90K. Thus, as we stated last, “… we continue to prefer the ED wave count until proven otherwise.” Well, we have been proven otherwise and have adjusted the ED pattern to a non-overlapping impulse pattern, which also moves higher. Even better. See Figure 1 below.

Based on the impulse pattern, BTC should wrap up the orange W-3 of the grey W-iii of the green W-5 of the red W-iii. The ideal target for the orange W-3 is $106,500 to 109,220. That zone represents the blue (nano-degree) 300% Fibonacci extension and the orange (micro-degree) 261.80% Fib extension, which are common 5^th and 3^rd wave extensions, respectively. From there, the orange W-4 can start, etc.

Moving Our Long-term Price Target Up

October last year, see here, we shared the four phases of Bitcoin and projected an upside target of ~$106K based on a standard 200% Fib-extension of the red W-i, measured from the red W-ii low. See Figure 2 below.

These four phases were correct, but we can now adjust our upside target as Bitcoin’s current rally extends. That we could, of course, not know a year ago, but it means BTC could target the 300-400% extension at $216-445K. Once the red W-iii completes around $119-147K, we can better determine where BTC will top at the end of next year.

In conclusion, the EWP count from the short to the long term strongly suggests that Bitcoin is still a good buy on any pullback before it reaches $119-147K. We expect at least $216K to be reached, possibly as high as $445K, contingent on holding above the late-October low. But once the red W-iii is completed, it would not be a bad idea to ease off the gas pedal.