Bitcoin Jumps 9%: Is This Executive Order the Reason?
Here’s what our “wave model” suggested for Bitcoin before the rally
by Bob Stokes
Updated: March 10, 2022
Bitcoin and other cryptocurrencies surged higher on March 9.
CNBC provided this explanation (March 9):
Bitcoin and other cryptocurrencies were higher on [March 9] after President Joe Biden announced his highly anticipated executive order on digital assets that appeared to take a supportive stance toward the industry.
The basic message of the executive order focuses on development of the crypto market as opposed to unrealistic regulations.
Around midday (March 9), Bitcoin was trading 9.5% higher at just north of $42,200. Litecoin was trading around 9% higher and Ethereum was posting a 7% advance.
It's true that often -- although, far from "always" -- financial markets tend to have brief emotional responses to news, and cryptocurrencies are highly emotional markets in the first place. However, after temporary spikes (whether up or down), markets tend to return to their established trends.
Those trends are ascertained by looking at a financial market's Elliott wave structure, which reflects the repetitive patterns of investor psychology.
In the case of Bitcoin, Elliott Wave International crypto analyst Tony Carrion said this in the March Global Market Perspective, which published on March 4:
Focusing our attention on Bitcoin, our Intermediate wave model is bullish.
The point is: Bitcoin's Elliott wave structure was already bullish, even before that executive order.
Keep in mind, that just one day before the March Global Market Perspective published, Bitcoin's price rise was not a given.
As a March 3 Marketwatch headline said:
Most big cryptocurrencies post drops
Also on March 3, the Crypto Fear and Greed index showed a reading of 39, which indicated fear. In other words, many crypto observers were bearish. By March 8, that index slid to 21, indicating extreme fear.
Even so, Bitcoin's price action was strongly positive on March 9.
As Elliott Wave International has noted many times, when sentiment reaches an extreme, prices often move in the opposite direction from what the majority expect.
Having said that, Bitcoin has been in a bullish pattern for quite some time and another Elliott Wave International observation is that when the government jumps aboard a financial trend, they usually do so late in the game.
As you might imagine, no analytical method can provide certainty about a market's future price path. However, the Elliott wave model has proven itself time and again.
Get the details of our Elliott wave forecast for Bitcoin and other cryptocurrencies by following the link below.
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