Three weeks ago, we saw that the () was forming a, and based on our Elliott Wave Theory (EWP) analysis, we noticed that:
“…BTCUSD should now conclude the final fifth wave (orange) to ideally reach $60-62K, perhaps up to $56-59K. See the orange and gray boxes of the target zone in Figure 1 above.”
Moving forward: BTCUSD bottomed on May 1 at $56516, after forming a complex W-4 minor (orange) that, unfortunately, we did not predict. See Figure 1 below. However, Bitcoin bottomed right inside the lower range and at the bottom of the green W-4 target zone, a classic 38.20% retracement of the entire green W-3.
Since that low, BTCUSD has experienced what can be described as a five-wave rally (gray Wi) and, yesterday, bottomed right inside the gray W-ii’s ideal target zone of $60+/$1.5K. Therefore, provided it stays above the colored warning levels shown in Figure 1, with each lower level increasing the odds that the W-4 bottom has not arrived, we can start to expect the gray W-iii. However, it will take at least a fresh break above the 20-day simple moving average (20d SMA) followed by a daily close above the blue 50d SMA to be more confident that the bottom is in place.
In that case, Bitcoin will be able to attack the upper descending gray trend line of the potential Bull-flag pattern still in progress. A break above this trend line will close the issue in favor of the Bulls and we should then ideally expect ~$92K (target of the Bull flag pattern).
Third Party Advertisement. This is not an offer or recommendation by Investing.com. Consult the information here or
remove ads
.
Further evidence that a major low was made in early May can be found by overlaying the Crypto Fear & Greed Index onto last year’s Bitcoin price chart. See Figure 2 below.
Figure 2 shows that the June and September 2023 lows coincided with below-average readings. Furthermore, the January low also saw below average sentiment. The May 2 Fear & Greed reading of 42 coincides with previous Bearish sentiment at important recent price lows.
Therefore, even if we remain long-term bullish on BTCUSD and expect it to reach $105-140K, the Bulls have their work cut out for them. They need to prove that they mean business at least with a rally above the 50d SMA. Because, at the end of the day, the Bull flag pattern is still only potential, albeit highly probable, and sentiment, while relatively Bearish on May 2, can always become more Bearish.
