In our last Bitcoin update, where we provided a forecast for 2024, we found that based on historical evidence:
“BTC moved in late November/early December from an early bull phase to a mid-rally phase, which will end in late 2024, and every time this phase transition happens, BTC struggles for a few months: it peaked in January +/- about 1 month ., bottomed in February +/- 1 month with an average loss of around 20 +/- 5%, then rose in July +/- 1 month. Thus, we should expect the first quarter to be “weak” , and that the second quarter will be strong. From the perspective of EWP waves, we expect BTC in the second wave W-2 to be green from the third wave W-iii to be red, which matches the four-year cycles. See Figure [1] below.
Don’t win like others…but win more than 900% with us
Use InvestingPro’s ProPicks lists to identify the strongest stocks that outperform major indices by more than 900%, and know the fair values of any stock around the world and its financial health to make the best sound decisions based on solid data.
Take advantage of the last chance to benefit from the discounted price on InvestingPro! Enjoy the benefits of the investment strategy and fundamental analysis platform InvestingPro at a huge discount, with an additional discount for readers of our articles, as they get an additional 10% discount on the Pro+ subscription for one year using the “sapro11” coupon. You can also get an additional discount for the two-year subscription when using the “sapro2” coupon.
Bitcoin fast forwarded to January 11, where it peaked at $49,054 and has since seen an 18% decline. It’s the biggest rise since the rally began from the September 2023 low, strongly suggesting a green W-2 wave to the $37+/-2.5K level currently in play. In fact, the first quarter has been weak so far, with all gains made since December 4th now erased. In addition, we have improved our Elliott Wave Principle (EWP) calculation to take into account all waves since that decline.
Figure 1. BTC daily chart with technical indicators and detailed EWP count.
Since the second waves are corrections, which always move in three waves and are labeled “a-b-c”, BTC should now be in the (gray) W-a region of the green W-2 wave. See Figure 1 above. Typically, the first phase of the retracement (W-a) reaches approximately the 38.20% retracement level of the previous equally impulsive advance. In this case, the first wave is W-1 green; 38.2% is $39,790, and currently the BTC price is close to that. Meanwhile, many technical indicators such as the RSI and MACD are in the oversold zone. And therefore,
We should expect a “death point bounce”, which is the gray W-b wave, which usually corrects itself by 50-76.40% of the W-a wave. Sometimes more, sometimes less. In this case, that means $45.0 +/- $1.5k. Once the W-b (gray) wave is complete, the third and final phase, W-c, must be achieved. C waves are often fast and furious and are related to preceding W-a such as 1x a to 1.618x a. And again, sometimes more, sometimes less. But we can only work with what we know. Therefore, these Fibonacci-based model relationships target $35+/-1K, which matches the aforementioned W-2 target area of $37.5+/-2.5K.
The dotted horizontal lines on the chart in Figure 1 show what we call “warning levels,” in this case, for the bears. Above the dotted blue line at $42,140 is the first sign that a gray W-b is underway. The gray line at $43,525 is the second signal, and so on. Each higher level/signal increases the probability of a W-b wave occurring. If the BTC price moves above the dotted red line, which is the highest level on January 11, this tells us that there is already a W-3 wave.
Assuming that the W-2 wave bottomed at around $34K while we know that the W-1 wave was $24K ($25 -> $49K), we can calculate the W-3 wave to ideally reach: $34K + 1.618 x $24 thousand = $72.8 thousand. And so, as stated in many previous articles:
“We have been bullish on BTC for some time. However, our bullish scenario has completely stalled at the sub-$25K level. Only when that happens will we change our overall long-term bullish view, which BTC is proving to be more true with every update we provide, based on BTC’s previous cycles, made up of four more secondary phases, are currently in the “mid-rally phase” and therefore close to the next upward trajectory, which could target $100-200+K by the end of 2025.”
