For those new to our updates and as a reminder to regular readers, we have been bullish on Bitcoin (BTCUSD) since our first article on FXStreet was posted in late August; where we presented our preferred Bullish Elliott Wave (EW) sequence to ideally and at least ~$83K.
Though we cannot foresee every twist and turn beforehand, and the August through October period was confusing at times, we stayed the course and kept our premium members and readers on the right side of the trade. Namely, since that first article, we have been tracking BTC’s advance in, preferably, what’s called in the EWP, an “Ending Diagonal.” In our previous update from three weeks ago, we found
“… However, the orange W-b may not be complete, and a break below the October 4 low can usher in the option shown in Figure 2 below. It suggests we see another small (blue) W-c lower, equal in length to the blue W-a, targeting the lower end of the ideal (orange) W-b zone at $58K. From there, the orange W-c setup can then be tried again.”
Fast-forward to October 10, when Bitcoin briefly broke the October 4 low, bottomed right at the expected level ($58869 vs. 58K), and has rallied since. Thus, the alternate path we presented materialized in which the orange W-b was completed protracted, and the orange W-c is now underway. See Figure 1 below.
Figure 1. Our preferred detailed, short-term EWP count of BTCUSD
Thus, we continue to prefer the ED wave count until proven otherwise. This requires Bitcoin’s price to stay above the October 10 low on any pullback, with a severe warning below last week’s low (October 23 at $65171). Namely, the orange W-c of the grey W-iii is underway and is subdividing into smaller waves: tiel blue W-1, 2, 3, 4, and 5). We anticipate the orange W-c to ideally reach $74.8-78.4K, possibly as high as $82K on any unforeseeable wave extensions.
Although, at this stage, it is doubtful if the Bulls will lose control, and we have our colored warning levels to tell us that is the case, with the first (blue) warning for the Bulls at today’s open (~$70K), we could still see the high-$40Ks per the most bearish. But in our opinion, it is the least likely option, and we are therefore not showing it. It’s just an “insurance policy.”
How do you use this work to your advantage? Well, simple. We have been correctly Bullish and able to forecast the price action over the last months reliably and accurately using the ED’s path. Therefore, it remains our preferred POV, contingent on the price holding above the October 3 low, with a severe warning on a drop below the October 23 low. For example, these price levels can be used as stop (loss) levels. We always trade the direction of the preferred view, while the alternative EW counts are only used as our “insurance policy” if we speculate wrongly. Ultimately, we are all speculators—people who guess about something uncertain.
