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Are we riding fifth Bitcoin wave?

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Have you ever heard about Elliott waves? No? Well, we’re not surprised. Even among market technical analysis specialists, they’re quite arcane. So let us tell you what they are and why they matter, and what they have to do with current predicament of Bitcoin. Just keep reading, we won’t get technical on you, only plain English.

Elliott waves are a form of technical analysis used to forecast the stock market (and, over the last decade, the crypto market as well). Using this technique requires of you to analyze a chart in such a way that you can identify a kind of event called “wave” which is something of a fluctuation in the market, and it’s supposed to reflect the psychology of the moment. According to this theory, all markets trend in five waves. Once the fifth wave hits the market, a new trend will begin. It can oppose the previous pattern or amplify it, but it will be a different one.

Was that too abstract? Yeah, we know. Let’s explain it in more practical terms: Bitcoin will go up again once the fifth Elliott wave reaches it. It’s as simple as that, according to this tool.

It sounds a bit magical or too empiric, but many technical traders use this approach all over the world to make money. The relevant question now would be, of course, is the current Bitcoin wave the fifth one? The answer is no, and we’ll explain to you why.

Bitcoin’s fifth wave is not here yet

Several analysts and YouTubers have been publishing their own view on the current situation and, for many of them, this is the final Elliott wave indeed. But we have reasons to disagree with them.

One of the “principles” you need to dominate with this technique is that everything should always be interpreted (or constructed) in the simplest possible way. That’s a problem for those who are predicting the final wave is here because they’re constructing their waves in a somehow complex form that needs a lot of justification when it should be self-evident.

Then, there’s the problem of cognitive bias (the tricks our mind plays on us at times that impair objectivity). We’re all sick of the bearish market. It’s been going down for 11 months now and, if that wasn’t bad enough, last week it became a carnage on Wednesday, and then again over the weekend. We all want for things to get better as soon as possible. And that is the problem as well.

Elliott Wave theory also states that you should never construe any scenario in a way that aligns with your wishes. Given several possible interpretations, you must always choose the one that suits your goals the worst, unless the evidence is so strong that no other explanation is possible. This avoids a cognitive trap known as “confirmation bias” which means that we believe what we want to believe, instead of what we are seeing.

In other words, when you work with Elliott Waves, you must always be sure that your own wishful thinking is not getting the best of you. Since it’s reasonable to assume that the analysts that believe in the fifth Bitcoin wave want it to arrive, they’re breaking this simple rule.

To wrap things up all we can say is that the fifth wave will arrive sooner or later. We can’t tell you when (Elliott wave theory doesn’t include any kind of reliable timing prediction), but it always comes.

Then Bitcoin will rise again, and the chances are that it will reach levels that we couldn’t possibly imagine right now. But that’s not what’s currently happening. Just in case you’re curious, the best analysts agree that we are currently riding the third Bitcoin wave, so we still have two to go.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

Image Courtesy of Pixabay.

Bitcoin

Bitcoin Price Dumps Below $41,000 Amid Uncertainty

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Bitcoin price dumped hard on Monday, briefly slipping below $41,000, erasing gains recorded in the previous week. The premier cryptocurrency seems to have exhausted its recent rally propelled by industry vulnerabilities. At the time of writing, the world’s largest cryptocurrency was trading slightly lower at $41,385. Bitcoin’s total market cap has dipped by 2% over the past day, while the total volume of BTC tokens traded over the same period climbed by 58%.

Fundamentals

Bitcoin price has been facing retracements and a rollercoaster over the past few days after recently rocketing to a 20-month peak. On-chain data has suggested that many investors used the opportunity to take some profits, leading to a decline in the asset’s price.

Bitcoin’s price slump is mirrored in the wider crypto market, with the global crypto market cap decreasing by 1.85% over the past 24 hours to $1.55 trillion. The total crypto market volume has increased by 32% over the same period. The Crypto Fear and Greed Index has plunged from a level of extreme greed to a greed level of 70, suggesting a decline in risk appetite.

Ethereum, the largest altcoin by market capitalization, is currently trading at $2,167, down almost 3% for the day. Meme coins have been hit hard by the market slump, with Dogecoin and Shiba Inu down by more than 4% over the last day.

Last week on Thursday, cryptocurrency experts took notice of…

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Bitcoin

Bitcoin Price is in Consolidation Mode Despite Market Optimism Post-Fed Decision

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Bitcoin price edged lower on Thursday despite optimism in wider markets on the back of the Fed’s interest rate decision. The flagship cryptocurrency has been consolidating above the critical level of $42,000 after briefly topping $44,000, its highest level in 20 months. Bitcoin was trading 0.71% lower at $42,569 at press time. BTC’s total market cap has increased by more than 3% over the last day to $832 billion, while the total volume of the asset traded over the same period jumped by 22%.

Economic Outlook

Bitcoin price has been trading sideways over the past few days, suggesting a pause in its recent rally towards $45,000. The premier cryptocurrency has decreased by 4% in the past week but remains 15.22% higher in the month to date. The digital asset has staged a significant recovery this year after a torrid 2022 in which a string of scandals, including the collapse of FTX, led to a market meltdown, undermining the credibility of the sector.

The crypto market has been buoyed by the Fed’s latest interest rate decision. The US Federal Reserve on Wednesday held its key interest rate unchanged for the third consecutive time, in line with market expectations. With the easing of the inflation rate, members of the Federal Open Market Committee (FOMC) voted to keep the benchmark overnight borrowing rate in a targeted range between 5.25%-5.5%.

Additionally, the central bank indicated that three rate…

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Bitcoin Price Blasts $44K in Spectacular Surge as Spot Bitcoin ETF Approval Looms Large

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Bitcoin price has been hovering above the $43,000 psychological level over the past two days amid anticipation about the potential approval of a spot bitcoin ETF. The flagship cryptocurrency has climbed more than 16% in the past week and nearly 170% in the year to date. Bitcoin’s total market cap has increased by nearly 5% over the past 24 hours to $858.9 billion, while the total volume of the token traded rose by 43%. The Bitcoin price was trading at $43,914 at press time.

Fundamentals

Bitcoin price has posted significant gains over the past few days, climbing to its highest level since April 2022, before the crash of a stablecoin that started a litany of company failures, pummeling crypto prices. The world’s largest cryptocurrency briefly topped the crucial level of $44,000 on Wednesday amid rising momentum despite being massively overbought.

According to analysts, with no spot bitcoin ETF approvals yet and the halving event five to six months away, the market is riding on FOMO. Capital has been flowing in the Bitcoin market amid enthusiasm that the launches of spot ETF will bring in billions of dollars of new investment into the crypto sector.

Investors have already started providing capital as seed money for ETF products. Notably, a recent report by CoinDesk showed that the world’s largest fund manager, BlackRock, received $100,000 in capital from a seed investor for its spot bitcoin exchange-traded fund…

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