Bitcoin: How Sentiment Suggested a Change of Trend
There’s more to Bitcoin’s swings than Elon Musk’s tweets
by Bob Stokes
Updated: June 10, 2021
Back in March and early April, as bitcoin was climbing to its all-time high above $64,000, almost everyone and their uncle were expressing high expectations for bitcoin's further bullish prospects.
Here's just a small sample of headlines:
- Can BTC Really Hit $115K by Summer's End? (Nasdaq.com, March 17)
- Increased Demand for Options Indicate Bitcoin Heading Even Higher (Newsweek, April 1)
- Bitcoin Price Predictions: BTC Will Hit $95K by 2022? (Yahoo! Finance, April 2)
Our own April 12 U.S. Short Term Update took note of this highly speculative fervor toward cryptocurrencies and said:
Bullish sentiment toward cryptocurrencies, and in particular bitcoin, is extreme and compatible with a change of trend.
Well, just two days later (April 14), bitcoin hit a high of $64,858.
Since then, the price of this "granddaddy" of cryptocurrencies had been cut in half as recently as June 8 when bitcoin was trading around $32,000. As of this writing, on June 9, the price has rebounded to north of $36,000.
The question now is: Is a bottom even in sight?
This is where the rules and guidelines of Elliott wave price formation are useful.
As Frost & Prechter's Wall Street classic, Elliott Wave Principle: Key to Market Behavior, says:
One of the guidelines of the Wave Principle is that two of the motive waves in a five-wave sequence will tend toward equality in time and magnitude.
The question then becomes: If bitcoin is indeed falling in a five-wave sequence from the April 14 high, what wave of the decline is underway now -- and what wave is next?
Often, the "two motive waves" that are equal in "time and magnitude" are the first and fifth waves. We are tracking bitcoin's decline in real time, so we know that it's reached a price juncture when we can apply a little math and determine a price target for a bottom.
You can see this analysis in full, including our bitcoin price targets, right now inside our flagship investor package.
Just follow the link below.
“We Need to Take on More Risk”
That’s what a money manager who oversees $4.6 billion in client assets recently said.
The explanation is that “more risk” is required to meet his clients’ goals.
Taking on more risk in capital markets might work out at this juncture …
… then again, it might be wise to review the Elliott wave model for stocks, bonds, gold, silver, the U.S. dollar, and yes, bitcoin.
You can find that analysis -- and lots more -- in our flagship investor package.
Follow the link below so you can prepare for market turns that may take many investors by surprise.
Commodity prices have taken a tumble during the past several days. A financial website says the decline is due to the "China crackdown" and "rising dollar." Yet, Elliott wave analysis foretold of the price drop when commodities were still rallying. Take a look at this chart.
See the Trader’s Classroom forecast and Elliott wave pattern that anticipated a rally which saw US Steel nearly double in price.
Ever heard of the acronym FOBI? It was coined here at Elliott Wave International and stands for the "fear of being in." Yes, just the opposite of the better-known acronym FOMO (fear of missing out). Here's an explanation.