Bitcoin: How Sentiment Suggested a Change of Trend
There’s more to Bitcoin’s swings than Elon Musk’s tweets
by Bob Stokes
Updated: June 10, 2021
Back in March and early April, as bitcoin was climbing to its all-time high above $64,000, almost everyone and their uncle were expressing high expectations for bitcoin's further bullish prospects.
Here's just a small sample of headlines:
- Can BTC Really Hit $115K by Summer's End? (Nasdaq.com, March 17)
- Increased Demand for Options Indicate Bitcoin Heading Even Higher (Newsweek, April 1)
- Bitcoin Price Predictions: BTC Will Hit $95K by 2022? (Yahoo! Finance, April 2)
Our own April 12 U.S. Short Term Update took note of this highly speculative fervor toward cryptocurrencies and said:
Bullish sentiment toward cryptocurrencies, and in particular bitcoin, is extreme and compatible with a change of trend.
Well, just two days later (April 14), bitcoin hit a high of $64,858.
Since then, the price of this "granddaddy" of cryptocurrencies had been cut in half as recently as June 8 when bitcoin was trading around $32,000. As of this writing, on June 9, the price has rebounded to north of $36,000.
The question now is: Is a bottom even in sight?
This is where the rules and guidelines of Elliott wave price formation are useful.
As Frost & Prechter's Wall Street classic, Elliott Wave Principle: Key to Market Behavior, says:
One of the guidelines of the Wave Principle is that two of the motive waves in a five-wave sequence will tend toward equality in time and magnitude.
The question then becomes: If bitcoin is indeed falling in a five-wave sequence from the April 14 high, what wave of the decline is underway now -- and what wave is next?
Often, the "two motive waves" that are equal in "time and magnitude" are the first and fifth waves. We are tracking bitcoin's decline in real time, so we know that it's reached a price juncture when we can apply a little math and determine a price target for a bottom.
You can see this analysis in full, including our bitcoin price targets, right now inside our flagship investor package.
Just follow the link below.
“We Need to Take on More Risk”
That’s what a money manager who oversees $4.6 billion in client assets recently said.
The explanation is that “more risk” is required to meet his clients’ goals.
Taking on more risk in capital markets might work out at this juncture …
… then again, it might be wise to review the Elliott wave model for stocks, bonds, gold, silver, the U.S. dollar, and yes, bitcoin.
You can find that analysis -- and lots more -- in our flagship investor package.
Follow the link below so you can prepare for market turns that may take many investors by surprise.
The price of the U.S. "long bond," the 30-year Treasuries, is down 50% since 2020. The corresponding rise in interest rates has been reshaping the financial landscape. When might interest rates come down? Watch Market Trek host Brian Whitmer give a one-of-a-kind, Elliott wave-based explanation that has nothing to do with the Fed or economy.
The market for zero-day options is so hot that an exchange-traded fund has been created. Yet, this casino-style action will likely result in even more billions being lost. Even so, these two charts reveal that many speculators are reveling in high risk.
Just over 100 years ago Argentina was one of the world's most prosperous countries. How things have changed... Now that Argentina has a flamboyant new president, what does social mood suggest for the country next? The editor of our Global Rates & Money Flows service Murray Gunn shares his thoughts.