Bitcoin: Crypto’s Prodigal Son Returns in Remarkable Bullish Reversal

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Peaking at a $69,000 coin at the end of 2021 amid a feverish bout of zero-hit heroes and a supposed surge of crypto millionaires and influencers, it was missing a key ingredient in the rise to power. power of Bitcoin (BTC-USD), regulation. As the crypto prodigal son seeks to make a remarkable bullish reversal backed by two SEC filings from BlackRock (BLK) and Fidelity, what is seen as institutional crypto adoption. One would imagine that as these heavyweights pursue an ETF-like model for Bitcoin, something will eventually give way.

According to Reuters, the SEC raised gigs with the Nasdaq in a recent filing for a Bitcoin ETF spot from BlackRock. Over the past few years, the SEC has rejected dozens of applications for spot Bitcoin ETFs, noting the standards designed to prevent fraudulent and manipulative practices and protect investors. Subsequently, the ETF industry is trying to address these concerns.

Last Friday, CBOE filed a new application with the SEC for a Bitcoin ETF from Fidelity. This filing named Coinbase (COIN) as a platform that would aid police manipulation in the proposed ETF.

In the past year alone, Bitcoin has seen a 100% surge from the $15,000 low, navigating through several banking meltdowns and of course the technical demise of cryptocurrency exchange FTX and now has technically posted a higher high to initiate a third bullish move past a rejection on the monthly chart directly towards the $40,000 price region.

So, can this bullish move be taken seriously, or is it maybe a bullish trap?

From a technical point of view, a three-wave structure can break out giving a likely target that you can see that I’ve identified in the structures of various major US stocks that I’ve documented with Seeking Alpha, but as it says the old adage we don’t have a crystal ball, but we can imagine that as the press for some form of regulation builds, positive news on that front will make that breakout real.

To give a brief history of Bitcoin, as mentioned at the top of the article, this cryptocurrency broke above $69,000 in October 2021. By creating a three-wave bearish pattern, I was able to identify that the break below $32,000 would lead to a target of $14,900 first, then $10,000 if there were no signs of a turnaround at the former. Bitcoin hit the $15,000 region before showing a three-wave pattern on the weekly chart in early 2023, which has now become the three-wave pattern we will be looking at in this article.

If we look at the chart below we can see the bottom around the middle of the $15,000 region with quite a bullish move up, it wasn’t until several months later that the bearish rejection candle was printed, which leaves room for the possibility of a third wave to the north if this now wave one two structure is to be broken above.

Bitcoin Monthly Chart (C Trader)

Further, we can then see the attempt to launch the third wave so far by piercing the rejection line at $30.5k. If this move holds, we can expect $40,000 first and then $46,000 before revisiting the $15,000 region.

As a final note, I am issuing a buy signal for Bitcoin on the basis that it has technically passed the $30,000 rejection, but I am aware that a positive regulatory step could be a factor in both holding the wave and in how fast it could go. target. I would expect Bitcoin to first hit $40,000 in the next 30120 days.

About the Three Wave Theory

The Three Wave Theory was designed to be able to identify the exact probable price action of a financial instrument. A financial market cannot go up or down significantly without making waves. Waves are essentially a mismatch between buyers and sellers and imprint a picture of a likely direction and target for a financial instrument. When waves one and two have formed, it is the high high/low low point that gives the technical indication of future direction. A wave one will continue from a low point to a high point before finding a large enough release to then form wave two. When a third wave breaks into an upper/lower trough, the only likely numerical target rollover available on a financial chart is the equivalent of wave one’s low to high point. It is highly likely that wave three will seek to digitally replicate wave one before making its future directional decision. It may continue beyond its third wave target, but it is only evidence from the first wave that a price was able to continue before rejection that can be considered a likely target for a third wave. The Ward Three Wave Theory link is in my bio.

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