BTCUSD: New Elliott wave model of 2024 bull market

Updated

In the middle of January 2024, it appears that the 2023 bull market of bitcoin has found a meaningful apex with the completion of a five-wave Elliott wave sequence on top of the base structures for a bull market supported by the bitcoin halving event in c. April 2024.

This provides an opportunity to review the market and evaluate our model based on accomplished market data. From this we can paint a new, more detailed picture of the potential and hopefully the future of the market going into and past the halving.

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The proof for the validity of the assignment of wave one (red, Minor degree) lies in the integrity of its subwaves. All peaks and lows are accounted for in acceptable form and sizes over four or five levels of wave degree.

The current pullback is a consequence of market structure, a requisite for building the next larger structures. It has nothing to do with the idea of “buy the hype, sell the news.” The timing is coincidental, but since so many people believe this nonsense and use it as an excuse to sell and take profits, it becomes a self fulfilling prophecy. It plays into and aids the natural course of the market. When people finally realize that they have been fooled, fell victim to fear, they start buying which adds to the strength of the following wave three. The skilled Elliott wave analyst decouples himself from these emotions, and looks for signs of the bottom of wave two. The market appears to be close to that, if it hasn’t printed to bottom last night.

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Notice that the depth of red 2 pullback has been limited by
A) the center line of the overall bull market trading channel, just like that channel also limited the advance to 49000 at the upper trend line.
B) the strong support area from the congestion of trading in mid-December at the 38000 range.

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Oops, I meant mid-November.
By early December the market started spiking into the fifth waves of the open wave sequences.

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The market is recovering from the pull back of wave 2. Most traders are screaming crash, reflecting the typical hysteria in wave two bear sessions.
In this recovery, bitcoin has printed clearly bullish waves, having completed wave one and two in probably Minuette degree. It is currently advancing well in the middle of wave three at around 42000 points, with the projected 1.618 Fib level at about 42.7 k, the first reasonable ending point for wave three. The 2.618 level is at 44.7 k. That region should locate the apex for a correction in wave four.

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Chart 2024-01-26 13:50 EST

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The third wave advance north hit the 1.618 fib level extension of wave one almost exactly this evening, as expected. Previously it took a little bit of time to advance past the 1.414 level, resting in a subwave correction. It remains to be seen whether this is the end of wave three or whether there is more juice in it. In any case this all looks very much like a bullish run.

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Recovery has been proceeding at a slow rate, fighting through resistance from the choppy regions of the second wave pull back

It is still not clear whether the third wave in the recovery is actually completed close to the 1.618 fib mark. There were two 1-2 wave sequences at its bottom which may still be in play in their upper waves, as indicated in this chart. That would Mae the third wave extended however, but its size does not suggest this.
Rather than declare wave three complete, and designate trading in wave five now, I am deferring that decision until a later time when the market tells us more of its intent.

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Look how far this market has come in just a few weeks. From 38.5 k to 61.5 k. The power of the third wave.
The market has confirmed every step of this model.

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Bitcoin has entered the realm of price discovery above the 2021 bull market high.
In this region, Fibonnaci rules, in addition to the anxiety of traders around even numbers. We shall see how they behave around 100000, which is on target for mid-April.

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From this chart, we see that the third wave, purple line, is far from finished. The finish can be “guestimated” from common Fibonnaci extension ratios between the first and third wave sizes in the Elliott Wave Principle.

unbeldi

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