This is an analysis of BTCUSD price action based on Elliott Wave Theory, aiming to predict whether Bitcoin will reach its long-term target of $125k-$140k via a "short path" or a "long path".
Long-Term Target:
- Long-term target for this bullish cycle (which began at the 2022 low) is $125,000 - $140,000.
Risk Management:
- As price nears this target, traders should be very mindful of their risk due to Bitcoin's volatility.
- Trader should plan to take some profits when the price reaches the target region and use a trailing stop to protect gains.
Current Sentiment:
- Current sentiment does not align with the "peak euphoria" seen at previous cycle tops (2017, 2021), but sentiment can spike quickly.
Elliott Wave Counts (The "Paths"):
This analysis uses Elliott Wave Theory, which posits that market prices move in discernible patterns of waves. The core idea is that a complete "impulse" wave consists of 5 waves, and a "corrective" wave consists of 3 waves.
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Overall Cycle (from 2022 low): The analyst sees a reasonable count of 5 waves from the 2022 low.
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Primary Count (Black Path - Longer Path):
- Price is currently in the final portion of wave 5 from the August (of the previous year) low.
- Within that shorter cycle, price is in the final wave "circle v" of 5 from the April (of the previous year) low.
- On the smaller timeframe, price is nearing completion of the initial wave (i) of the "circle v".
- Why it's "longer": This path suggests a more protracted and larger wave "circle v" from the April low, implying more sub-waves and therefore a longer time frame to reach the $125k-$140k target.
- Support for this path: Roughly $85,000 - $90,000.
- Current bias: The analyst tentatively favors this black count, primarily because it aligns better with the higher end of their $125k-$140k target range.
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First Alternative (Purple Path - Shorter Path):
- This path suggests price is further along within wave "circle v", meaning it could complete in a more direct fashion.
- Why it's "shorter": It implies fewer remaining sub-waves before the "circle v" completes, leading to a quicker push to the target.
- Support for this path: $96,000 - $100,000 (upper support for wave (iv) in purple).
- Challenge with this path: It would require "serious extensions" in the current rally from the April low to reach the higher timeframe targets ($125k-$140k), which might generate the kind of euphoria seen at major tops.
- Current status: While the smaller timeframe chart without larger context might favor the purple count, the larger degree expectation for Bitcoin reaching $125k-$140k leads the analyst to tentatively favor the black count.
Recent Price Action and Key Levels:
- Weekend High: A higher high over the weekend looks like a 3-wave rally, which increases the odds of the purple count (as an expanded b of (iv)).
- Micro Resistance for Downside: $104,000 - $105,900.
- Upside Potential: If price gets above $106,000, odds of a more immediate higher high increase.
- Current Expectation: Price is expected to continue down to upper support in the $96,000 - $100,000 region.
- Ruling out Purple Count: A break below $93,400 would more effectively rule out the purple count in favor of the black count (as it would look more distinctly like a 5 up / 3 down for a (i)-(ii) of a larger wave "circle v").
Even Longer-Term ("Blue Count"):
- If price follows through directly higher to new all-time highs without a break below the upper support region ($96k-$100k), it increases the odds that Bitcoin is completing the entire rally from the 2022 low.
- Primary interpretation (if this happens): This would mean the entirety of the rally from the 2022 low is completing, entailing a more extended bear market afterward.
- Alternative (Blue Count): A reasonable case could be made that Bitcoin is just completing wave 3 from the 2022 low, which would entail a larger wave 4-5 that could take price north of $200,000.
- Risk Management for Blue Count: Even if the blue path plays out, it entails an approximate 50% pullback for wave 4, so trading for the black/purple counts is still the recommended approach from a risk management perspective.
In summary:
Bitcoin is nearing a significant top in its current bullish cycle, targeting $125k-$140k. The main question is how it gets there:
- Short Path (Purple): A more direct, quicker move to the target, potentially requiring "serious extensions" in the current rally.
- Long Path (Black): A more protracted move with more sub-waves, currently favored by the analyst to reach the higher end of their target.