The ideal target of ~$54K for (Bitcoin) has been reached for a more protracted correction, and if Friday’s low holds, we expect BTC to rally to around $89-91,000.
One-two Became W-X-Y.
Three months ago, we showed that (BTC/USD) was forming a bull flag. Well, like it or not, the cryptocurrency is still in it. The two Elliott Wave Principle (EWP) counts we presented in our last update here pointed to either a bottom around $62,000+/-2,000 for a W-i, ii setup or below that we could expect a deeper correction to ideally around $54,000 for a protracted W-X-Y correction. The Bulls lost $60K earlier this week, and on Friday, the crypto reached as low as $53,528. Hence, we must ask, “Is the bottom in?”
Figure 1. The Daily Chart of BTC/USD Shows Several Technical Indicators and the EWP Counts.
The Downside Target (NYSE:TGT) Was Reached, but There is no Confirmation of a Low Yet.
In our previous update, we found that,
“The Bulls may have failed again, with the crypto’s price now below its 10-day, 20-day, and 50-day Simple Moving Average (SMA) and toying with the lower edge of the Ichimoku Cloud (red and orange horizontal arrows, respectively). Therefore, our alternative EWP count presented in our last update is becoming more likely: the “dreaded” (grey) W-X-Y, protracted correction. A standard W=Y targets ~$54K, which is close to the late April low, the 200d SMA, and the lower trendline of the Bull flag.”
Thus, although we remain bullish over the long term and expect BTC/USD to reach well over $100K before the run since the 2022 low is over, the Bulls may have lost this battle to win the war. Since the early June (Wave-X) high, enough waves are now in place to consider the Wave-Y complete. See Figure 1 above.
Moreover, BTC/USD has reached the 38.2% retracement of the green W-3, which is a typical (green) 4th wave targeted. Lastly, potential positive divergence is developing on the daily RSI5 (dotted green arrow). However, there are no signs of a bottom yet.
It will require at least a daily close back above the (Red) 200-day simple moving average (SMA), followed by recapture of the blue 50d SMA and the Ichimoku cloud in a five-wave fashion. That will turn the current five red horizontal arrows into five green arrows, signaling the trend has changed from down to up.
Thus, although our downside target zone has been reached (Y=W, 38.2% retracement), suggesting that the low is most likely in, we now need to wait for the next subtle clues to know our bottom call was correct. In that case, we expect BTC to reach the adjusted ideal target zone of $88,940-91,150.