Analyze what is the most likely Bitcoin (BTC) wave count?

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In this article, BeInCrypto will take a look at the potential number of waves for Bitcoin (BTC), after the sharp drop on December 4th.

Long-term BTC accounts

The main wave count suggests that BTC is in wave five (white) of a five wave bullish impulse. A bullish impulse is a five wave move, in which three waves are on the rise, while two are on the downside, and are considered corrective.

It is therefore the last bullish movement before a significant correction. The whole upward movement started in December 2018, when the price of BTC was $ 3,122.

The number of sub-waves is shown in yellow and shows that BTC is still in sub-wave two (yellow). Therefore, if the count is correct, there is still a considerable margin for the price to increase.

The only problem with this count is the fact that the trendline connecting waves 2 and 4 is almost broken (red circle). According to Elliott Wave Theory, the trendline should remain in place as long as the bullish movement is intact.

Therefore, in order for the count to remain valid, BTC needs to recover that trendline and stay above it.

Chart by TradingView

The alternate tally, which is more bearish, suggests that BTC is still in wave four of the same five wave bullish move (white). In this case, it would continue lower towards $ 30,000, before possibly starting another bullish movement towards a new all-time high, which would complete the bullish momentum.

The only problem with this count is the large gap between sub-wave two and four (highlighted). While they should have some alternation between them, the fact that sub-wave four is almost seven times as long as sub-wave two is extremely unusual.

Chart by TradingViewShort term count

Cryptocurrency trader @TheTradingHubb presented a BTC chart, which shows the price correcting towards $ 42,000.

Source: Twitter

Since the tweet, BTC has hit the target and bounced back. However, due to the length of the previous increase, it seems unlikely that the entire corrective structure will be complete. On the contrary, it might just be the first part of the correction before another drop (black).

In order for the bullish count to remain valid, BTC must remain above the $ 37,100 area. This is the 0.786 Fib retracement support level and a horizontal support area.

A decline below would make the bearish count described above more likely.

Chart by TradingView

For the latest Bitcoin (BTC) analysis from BeInCrypto, click here.

Disclaimer All information on our website is posted in good faith and for general information purposes only. Any action that the reader takes with the information found on our website is strictly at his own risk.

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