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Bitcoin: More Volatility Directly Ahead?

Here’s how Elliott wave analysis helps you prepare for cryptocurrency volatility

by Bob Stokes
Updated: May 20, 2021

If there's a single word to describe bitcoin's price action, that word is "volatile."

Yet, those who invested roughly a year ago in the cryptocurrency -- and stuck with it -- have been hugely rewarded. (At least until very recently, as bitcoin traded more than 50% lower from its all-time high on May 19, as the price careened nearly 30% at one point on that day alone.)

Indeed, Elliott Wave International cryptocurrency analyst Tony Carrion provided a video update on bitcoin in the March 2020 Global Market Perspective. You'll notice in the chart below that his analysis included a forecast for higher prices (as indicated by the upward arrow in the right side of the chart):

btc-labels

At the time, bitcoin was trading a tad north of $8700. Of course, since then, bitcoin has climbed as high as near $64,000 before pulling back significantly.

Remember, at the time the March 2020 Global Market Perspective published its bullish outlook, there was a lot of negative news about this "granddaddy" of crypto-assets.

For example, here's a Feb. 27, 2020 headline from a major financial publication (Forbes):

Bitcoin Has Crashed--Now What?

So, the upward rise in bitcoin from March 2020 was by no means a "given."

Realize that EWI's analysts do not extrapolate the present into the future as so many investors are inclined to do. No -- they focus on a market's Elliott wave pattern, and bitcoin's price pattern at the time strongly suggested that the cryptocurrency was not only headed higher -- but significantly so.

The questions now are: Does bitcoin have a lot further to climb -- according to the Elliott wave model -- or is an even higher degree of volatility expected just around the corner?

Well, a May 13 headline suggests that "fundamentals" are driving bitcoin's price (CNBC, May 12):

As much as $365 billion wiped off cryptocurrency market after Tesla stops car purchases with bitcoin

Yet, it may be a good idea to see what Elliott wave analysis suggests is next for bitcoin, in addition to other cryptocurrencies.

It's all inside our current Global Market Perspective. Get instant access by following the link below.

“Grand Supercycle Speculation Is On The Money”

That's the title of the second chart in our May Global Market Perspective: if you're an investor in search of financial insights, you'll want to read the commentary that accompanies that chart.

As you may know, "Grand Supercycle" signifies a historically long-term Elliott wave.

Speaking of Elliott waves, you'll also find a fascinating gold chart titled "Gold's Progressing Wave Structure." In addition to learning about gold's Elliott wave pattern, you'll also get insights into an "8-year cycle that has been persistent for 50 years."

Besides stocks and gold, our Global Market Perspective offers you actionable analysis of silver, cryptocurrencies, forex, rates, energy and more.

Our Global Market Perspective is professional-grade and you can peruse its 50+ pages in moments as you follow the link below.

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"Crash," "sink," "runaway freight train," and ever-lowering "limbo pole" are a few of the phrases used to describe the May selloff in grains, particularly soybeans. But before you blame the "bombshell" May 12 USDA supply/demand report for the slide, you'll want to read this first.

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Like all ideas that make you want to slap yourself on the forehead and scream "How didn't I think of that!", the idea behind socionomics is simple: Social mood impels social action. When you know social mood's trend, you can forecast everything from the stock market to culture to politics and more. So, how then do you define the social mood trend? Watch our Head of Global Research touch on that in this video.