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Will China's Crackdown Send Bitcoin's Price Tumbling?

Currencies / Bitcoin Oct 05, 2021 - 10:09 PM GMT

By: EWI

Currencies

July 2: "Bitcoin [is] at or near the end of [an Elliott wave] correction"

In early September, bitcoin hit a price level near $52,000 -- however, since then, the price has trended lower.

Indeed, on September 24 alone, the price of the cryptocurrency fell 5%.

The financial press pinpointed a supposed "cause":


Bitcoin and ether slide as China intensifies crackdown on cryptocurrencies

A China crackdown on cryptocurrencies seems like a logical "reason" for bitcoin's 5% slide, however, take a look at this next headline from the same financial website:

China's war on bitcoin just hit a new level with its latest crypto crackdown

You might say, "OK, it says pretty much the same thing as the first headline, what's the point?"

The point is: That second headline published on July 7 -- just two weeks before bitcoin hit a bottom near $29,000 and then rose to that price near $52,000 in early September.

In other words, China's stern measures against cryptocurrencies are nothing new and bitcoin prices have both risen and fallen during the crackdown.

Instead of relying on headlines, Elliott Wave International's head crypto analyst Tony Carrion uses the Elliott wave model to forecast cryptocurrencies.

Here's what he said in the July 2 Global Market Perspective, a monthly Elliott Wave International publication which covers 50+ worldwide financial markets:

Our preferred count has been to consider the price action since the December 2018 low to be the subwaves of a [sizeable Elliott wave] advance.

Bitcoin [is] at or near the end of [an Elliott wave] correction.

In other words, Tony was anticipating a rebound in bitcoin's price, even as the majority of investors were bearish.

That's the beauty of the Elliott wave model -- it anticipates price turns -- no matter what the news or prevailing sentiment.

You may have heard about that recent University of Chicago survey that said more than 1 in 10 people in the U.S. traded cryptocurrencies in the past year. Yeah, a lot of people.

No doubt, many of them are influenced by cryptocurrency headlines and forecasts that range from the wildly bullish (at least one headline said bitcoin was headed to $500,000) to the extremely bearish (more than one prognosticator has said bitcoin is headed to zero).

If you're among the many cryptocurrency traders, you owe it to yourself to get the objectivity of Elliott wave analysis.

As Frost & Prechter said in their Wall Street classic, Elliott Wave Principle: Key to Market Behavior:

Despite the fact that many analysts do not treat it as such, the Wave Principle is by all means an objective study, or as [Charles J.] Collins put it, "a disciplined form of technical analysis." [A. Hamilton] Bolton used to say that one of the hardest things he had to learn was to believe what he saw. If you do not believe what you see, you are likely to read into your analysis what you think should be there for some other reason. At this point, your count becomes subjective and worthless.

If you'd like to delve into the details of how the Wave Principle can help you objectively analyze financial markets, you can read the entire online version of the book for free.

All that's required for free access is a Club EWI membership. Club EWI is free to join and allows members free access to a wealth of Elliott wave resources on financial markets, investing and trading without any obligations.

Just follow this link: Elliott Wave Principle: Key to Market Behavior -- free and unlimited access.

This article was syndicated by Elliott Wave International and was originally published under the headline Will China's Crackdown Send Bitcoin's Price Tumbling?. 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.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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