Bitcoin (BTC) Wavenumber Analysis – When Will The Correction Be Over?

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According to the Elliott Wave Theory, Bitcoin (BTC) has either reached the end of a correction that began in April 2021 or is about to do so.

Of the three most likely scenarios for BTC movement in the short term, two of them suggest that a bottom has already been reached.

Long-term Bitcoin correction

In December 2018, BTC started a five-wave upward move (white) that is still ongoing. If true, we are now approaching the end of the fourth wave. It is common in these patterns that after another final upward move follows to complete the last wave. The number of subwaves is shown in red below.

Waves two and four had very similar durations, with the first continuing for 263 days while the second has so far developed for 284 days.

Due to the concept of alternation, there should be a distinct difference between these two waves in terms of time, complexity or retracement.

Since wave two ended at the 0.85 Fib retracement level (white), it would make sense for wave four to be shallow, eventually ending at the 0.5 Fib retracement resistance level (black ). This is where BTC is currently trading.

Potential short-term scenarios

There are three main possibilities for near-term future movement, and they all suggest that BTC is nearing the end of its correction. Cryptocurrency trader @TheTradingHubb tweeted a BTC chart, stating that the correction should be over soon.

The scenario described in the tweet is that of a regular flat correction. In this pattern, BTC appears to be in wave C (red), which would complete the corrective phase at the $33,300 support level.

A bottom near $33,300 would give waves A:C a ratio of 1:1 (red). On top of that, it would coincide with the support line of an ascending parallel channel that contains the entire move since April.

The second possibility is that BTC is ending the fourth wave in an extended flat correction. In such corrections, wave C is most often 1.27 or 1.61 times longer than wave A.

The target of 1.27 would lead to a low of $24,175. If correct, BTC could rebound to complete subwave four (black) and then decline once more, completing the final drop.

The 1.61 target sits at $12,175. A drop to this level would invalidate the entire bullish structure as wave four would dip back into wave one territory. Therefore, it seems unlikely that he will fall that deep.

Triangular scenario

The last likely possibility is that BTC is completing a contracting fourth wave triangle.

One of the main rules of the triangle is that each wave should not retrace much more than the 0.786 Fib retracement level. Currently, the prospective wave C has already done this. Therefore, it is imperative that it bottom out at the current level and reverse its trend.

The short-term movement, in this case, would be similar to that of the regular flat correction mentioned above.

However, the price is still likely to consolidate for a long time before finally breaking out.

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

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

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