Bitcoin bulls are finally retreating. After cryptocurrency skyrocketed to $ 42,000 in early 2021 year the price today fell below $ 29,000.And since BTC is one of the most popular assets these days, experts were quick to give their opinion. Analysts J.P. Morgan said the $ 40K is a "key battleground" that bulls must reuse to continue the uptrend. The Bloomberg report says much the same. Well, we would be very impressed if JPM and Bloomberg identified $ 40K as the key level when BTCUSD was $ 20K or $ 30K. But what is the point of stating the obvious, when there is already resistance in the region of 40 thousand dollars, that everyone can see? You don't need to be an expert to do this. We, at EWM Interactive, also did not know that the summit of 42 thousand dollars would form. With the price rising by thousands of dollars every day, one could only guess how much it might rise. However, we knew that no trend lasts forever, and neither does Bitcoin. As BTCUSD continued to rise, we urged subscribers not to chase it. Fortunately, even if an accurate forecast is not always possible, traders can always be prepared if they stick to the right mindset. The following charts show how the Elliott Wave Principle helped us prepare for a reversal. Besides, how could you take advantage of the situation when the intentions of the market became clear.
It was January 10th and the price was just under 40one thousand dollars. Bitcoin's 4-hour chart showed a clear five-wave impulse from $ 16,218 to $ 42,000. Of course, such a picture did not arise out of nowhere. It found its place in our big picture, which we shared with our subscribers that day. This was not easy either, since we are always against catching peaks. It was just a suggestion that it was better to stay out of the way as the correction follows each impulse. Three days later, when it came time to send updates to customers on Wednesdays, Bitcoin had already dropped to $ 34,300.
BTCUSD fell to $ 30,261 on Monday 11January. The decline, although not very clear, can be viewed as an impulse pattern denoted by i-ii-iii-iv-v. This meant that the ensuing recovery was most likely part of a three-wave correction in wave (ii) / (b). As long as $ 42,000 remained intact, another sell-off was expected to occur in wave (iii) / ©. A week later, it was already in the process.
Wave (ii) / (b) ended on January 14 at level 40113 dollars. However, the rest of the development should be part of wave (iii) / ©. And since the initial targets of the bears were below the bottom of wave (i) / (a), it made sense to expect more weakness below $ 30K. This chart also allowed us to shift the cancellation rate from $ 42K to $ 37,875. With Bitcoin at $ 35,500, the risk / reward ratio was not bad at all.
Bitcoin price continued to decline.Today the bears crossed the $ 30,000 mark and even hit the $ 28,800 mark. From a peak of 42 thousand dollars, that is, 31.4% less than in two weeks. In our opinion, this extreme volatility makes the adoption of Bitcoin as a widely accepted form of payment highly impractical. Imagine that Apple, Coca-Cola or Unilever risk losing 30% of their sales value in a matter of days simply because of a volatile currency ...
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