Bitcoin Market Outlook Elliot Wave Theory (W42/2024) // AlgoFyreThe market shows a bullish scenario with potential for an impulse wave up after a correction, possibly surpassing the all-time high post-election. However, two bearish scenarios suggest a major drop to 20K in the long term, highlighting significant downside risk.
🟢 Short-Term Outlook (Next Few Weeks to Months) - Bullish Scenario
🔸 Leading Diagonal (Green) Complete : The green lines on the chart represent the completion of the leading diagonal, which is the first wave of a larger impulse (wave 1). Leading diagonals often occur in the first wave of a new trend, indicating that a bullish trend is beginning. This is particularly important because it sets the foundation for a stronger upward movement that could follow after a corrective phase.
🔸 Corrective Phase (Red ABC) : After completing the first wave, we are now expecting a corrective structure. The red lines represent a potential ABC correction, a typical 3-wave corrective pattern in Elliott Wave theory. This correction could retrace some of the gains made in the leading diagonal, potentially finding support near key Fibonacci retracement levels (like the 0.25, 0.5, or 0.75 levels) drawn in orange on the chart.
🔸 Timing Around the US Election : The chart indicates that this ABC correction may take place leading into the US election, which is often a period of increased market uncertainty and volatility. It seems that the correction is expected to conclude before or around this event, setting the stage for the next major move.
🔸 Bullish Impulse (Wave 3) : After the correction, the chart projects a strong bullish impulse (the large green arrow), which would be the beginning of wave 3. In Elliott Wave theory, wave 3 is typically the most powerful and extended wave in an impulsive structure, often leading to significant gains. The breakout above previous highs around the 67,000-68,000 level (marked by the green wave 5 in the diagonal) would confirm the start of this impulsive wave, which could target much higher levels, possibly into the 70,000+ range.
🔸 Bullish Summary (TLDR):
The leading diagonal in green (wave 1) suggests that a new bullish cycle is underway.
We are currently expecting a 3-wave corrective move (ABC) before the next leg up.
The correction could end around key Fibonacci levels, potentially coinciding with the US election.
After the correction, a powerful wave 3 impulse is expected, likely driving prices significantly higher.
🔴 Short-Term Outlook (Next Few Weeks to Months) - Bearish Scenario
🔸 Bigger ABC Correction : The market is in the midst of a larger corrective pattern. The current movement is within the B-wave of this ABC structure.
🔸 Flat Pattern for B-Wave : The B-wave is forming a flat correction, which typically indicates a sideways consolidation with a final leg up before a downward movement.
🔸 C-Wave to 52K Area : After completing the B-wave, we expect a C-wave to the downside, targeting around the 52K level. This drop represents the completion of the B-wave within the larger ABC pattern.
🔸 Larger C-Wave Up : Following this drop, the final C-wave to the upside is projected. While this wave could potentially retest or even exceed the all-time high (ATH), it's not guaranteed. The key idea is that a significant rally is expected after the corrective B-wave down.
🔸 Major Downtrend Next Year : After this anticipated rally, a substantial downtrend is expected in the following year, potentially driving the price down to 20K or lower.
🔸 Bearish Summary (TLDR):
Completing a B-wave flat correction within a larger ABC structure.
Expecting a C-wave down to around 52K before a potential larger rally.
After the larger C-wave up, a significant decline is expected, leading to 20K or lower in the following year.
🔴 Mid-Term Outlook (Next Few Months to Year) - Bearish Scenario
🔸 Leading Diagonal Completed (Red) : The red structure shows the formation of a large leading diagonal to the downside, suggesting that a strong downtrend has already been established.
🔸 Corrective ABC (Green) : After the diagonal, a corrective ABC pattern has formed. This correction has reached the 0.786 Fibonacci retracement level, which is a common level for corrections to complete before resuming the primary trend.
🔸 Major Move to the Downside : Following the completion of this corrective phase, the chart is signaling the beginning of a significant bearish move, potentially leading to a price target near the 20K level. This aligns with the broader bearish outlook.
🔸 Bearish Summary (TLDR):
Finished a leading diagonal to the downside, followed by a corrective ABC pattern.
Correction reached the 0.786 Fibonacci retracement level.
Expecting a major bearish move from this point, with a potential target of 20K.
🔶 Key Takeaway
The market presents both bullish and bearish possibilities. The bullish scenario suggests that after a leading diagonal (wave 1) completes, a short-term ABC correction will occur, followed by a powerful wave 3 impulse to the upside, potentially pushing prices beyond the all-time high after the US election. On the other hand, the bearish scenarios indicate a significant downturn: one expects a C-wave drop to around 52K before a larger rally, followed by a steep decline to 20K or lower next year, while the other points to a completed leading diagonal with a corrective ABC reaching the 0.786 Fibonacci level, signaling the start of a major move down to 20K. Despite the potential short-term upside, both bearish scenarios ultimately point to a substantial long-term decline.
