Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Make Bitcoin's Volatility Work for You

Currencies / Bitcoin Jan 24, 2024 - 10:15 PM GMT



Here's a bullish forecast when a "crypto winter" was proclaimed

The price action of bitcoin has been the very epitome of volatility.

The good news for Elliott wave practitioners is that the greater the emotional swings in a financial market, the clearer the Elliott waves -- but not at every juncture along a market's price path.

In other words, Elliott wavers often have to exercise patience as the wave structure resolves itself. At these times, what is called an "alternate" wave count is usually considered. That is -- in addition to the preferred wave count, there's a second-best interpretation.

As Frost & Prechter notes in Elliott Wave Principle: Key to Market Behavior:

Because applying the Wave Principle is an exercise in probability, the ongoing maintenance of alternative wave counts is an essential part of using it correctly.

With that in mind, our January 2023 Global Market Perspective was considering both a bearish and bullish scenario for bitcoin -- with the bullish scenario being the preferred count. Here's the chart and brief commentary from that issue:

Under the bullish [scenario for bitcoin,] we're considering the Intermediate wave (4) correction to have ended at the 15,476 low of November 21.

Mind you, around the time the January 2023 Global Market Perspective published, bearish sentiment toward bitcoin was widespread. Here are some headlines:

  • 'Crypto winter' has come. Will it become an ice age? (Washington Post, Dec. 18, 2022)
  • Bitcoin's Price Targets for 2023 Are In -- and They Are Grim. Brace for a 50% Fall. (Barron's, Dec. 28, 2022)

However, bitcoin never breached that 15,476 level that was mentioned in our January 2023 Global Market Perspective.

That doesn't mean that Elliott wave analysis is always perfect, but it does offer context from which to forge a forecast.

Indeed, as of this writing, bitcoin is trading north of 40,000.

Is the rally over -- or is there a lot more upside to go?

You may want to check out our Global Market Perspective's latest analysis and wave count in our "Cryptocurrencies" section.

If you're unfamiliar with Elliott wave counts, read Frost & Prechter's Wall Street classic Elliott Wave Principle: Key to Market Behavior. Here's a quote from the book:

All waves are of a specific degree. Yet it may be impossible to identify precisely the degree of developing waves, particularly subwaves at the start of a new waves. Degree is not based upon specific price or time lengths but upon form, which is a function of both price and time. Fortunately, the precise degree is usually irrelevant to successful forecasting since it is relative degree that matters most.

Here's good news: You can read the entire book for free once you become a member of Club EWI, the world's largest Elliott wave educational community.

Club EWI is free to join and members enjoy complimentary access to a wealth of Elliott wave resources on investing and trading.

Just follow this link to become a Club EWI member: Elliott Wave Principle: Key to Market Behavior.

This article was syndicated by Elliott Wave International and was originally published under the headline Make Bitcoin's Volatility Work for You. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in