Bitcoin - Back to $ 40K first before heading to

 Bitcoin - Back to $ 40K first before heading to

While such percentage pullbacks are the norm for this cryptocurrency, the question remains: is the current rally just a dead cat leap or is BTC heading back to new all-time highs? Using the Elliott Wave Principle (EWP), I will try to answer this question and present the most likely answer. Unfortunately, there is no certainty in financial markets, but there are many if / then scenarios.

The Elliott Wave Principle still suggests going down and then up.

This February decline is what I call the “initial wave,” the red wave-a in Figure 1, and set in motion a broader retracement: black wave-4 in Figure-1. After the initial movement, there is always "first the bounce of the dead cat before the next lowering of the leg begins." In EWP terms, this counter-trend rally is called a B-wave. B-waves always consist of three smaller waves: a, b, c. In Figure 1, I've marked the B-wave red and the smaller waves green.

IMHO, the green wave-c of B is currently underway or may have already been completed, while the red wave-c should ideally be targeting around $ 41k. Why? Because the 4th wave (black main-4) often retraces about 23.60-38.20% of the previous 3rd wave of the same degree (wave-3), shown by the black rectangle. In addition, the C waves are usually equal to the length of wave A. Since the red wave-a has risen from 58.4 thousand to 42.9 thousand dollars, and the current rally of the red wave-b should usually reach the mark from 54.7 thousand to 56 , 1 thousand dollars, the next lower part (wave-c) should, therefore, aim at 39.2-40.6 thousand dollars. Are you still hanging out with me ?! As you can see, this target price range fits well with the 23.60% retracement level mentioned earlier.

However, C-waves can widen and, in this case, sink to $ 29.8K, which is close to the 38.20% retracement at $ 32.2K, but now I prefer the upper border of the black box, like in bull markets. the downside is often disappointing and positive surprises. How do we know the next lower leg is ok? This is confirmed when moving below the end of the red wave - the low, but warning signals will already sound if a break below yesterday's low ($ 49.3), followed by a break below the low of the green wave b at $ 46.3 thousand.

Now BTC may have another trick up its sleeve, as a 4th wave of this magnitude is often more of a side effect where recent gains are digested more in price than in time, creating a trading range. This means that the red wave B / bounce could even reach $ 64.3 (ranging from $ 56.9 to $ 64.2) before that pesky C-wave takes hold, which is, as the saying goes, “the carpet is ripped out. underground ”, bringing the price back to $ 40 +/- 2K. This could be called a non-standard apartment in EWP terms: see here. How do we know if this complex B wave is developing? Breakout and daily close above ATH with first warning on daily close above $ 55.9k.

 Bitcoin - Back to $ 40K first before heading to

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