Related Topics
Currencies , Investing , Trading

Bitcoin: Why Traders Should Not “Make Assumptions”

Why traders should approach cryptocurrency Elliott wave analysis with an “open mind”

by Bob Stokes
Updated: September 13, 2022

On June 18, Bitcoin hit a low of $17,614 and as the cryptocurrency meandered higher in a relatively tight trading range, some Elliott wave observers communicated with Elliott Wave International's Tony Carrion, our senior crypto analyst.

In a nutshell, they mentioned to Tony that the Bitcoin's price pattern since the low did not appear bullish but corrective (or countertrend). Of course, if correct, this means that the main trend is down.

However, in our July Global Market Perspective, Tony replied by illustrating that two of Bitcoin's prior big upward moves did not appear bullish at the start of those moves either.

The first chart he showed was this one. His commentary is below:


This is the early price action from what proved to be the pivotal low of March 2020. Looking at this choppy and mostly corrective looking price action, you probably wouldn't have thought that this was the launch point for the rally that took Bitcoin all the way to $64,000.

Here's another chart which Tony showed in the July Global Market Perspective, along with his commentary:


Here as well... at around this time last year, the early price action emerging from the mini-bear market that bottomed last June looked even more corrective than what we're looking at now. And yet, that $28,957 low of June 2021 took Bitcoin to $69,000 in November. So, when it comes to analyzing Bitcoin through the lens of the Wave Principle, you can't make assumptions. And you have to approach it with an open mind.

As of this writing, Bitcoin is trading more than $3,000 higher than it was when our July Global Market Perspective published -- and the 10% one-day surge on September 9 certainly got our attention.

Our September Global Market Perspective provides you with our latest Elliott wave analysis of Bitcoin, as well as other cryptocurrencies, including Ethereum.

Of course, no analytical method can offer a guarantee about a financial market's future price path. That said, in Elliott Wave International's view, the Wave Principle offers the best way to analyze financial markets, especially highly emotional ones like cryptocurrencies.

Follow the link below to tap into our Global Market Perspective's latest cryptocurrency insights in the section titled "Cryptocurrencies."

Does Diversification Really Protect Your Portfolio?

Many financial advisors say diversifying your assets is a good strategy for portfolio protection.

Yet, Robert Prechter's Last Chance to Conquer the Crash provides this perspective:

Countless advisors have counseled "diversification," a "balanced portfolio" and other end-all solutions to the problem of allocating your investments. These approaches are delusional... No investment strategy will provide stability forever. You will have to be nimble enough to see major trends coming and make changes accordingly.

Learn about the "immense risks" which global investors face for the remainder of 2022 -- and beyond.

You can do so by tapping into the insights in our Global Market Perspective, which covers 50-plus financial markets.

Get started by following the link below.

U.S. Stocks: Wave “Pattern Completed at 4 Degrees of Trend”

"Things will change over the course of the next few years," says our Financial Forecast co-editor Pete Kendall in this new interview. Hear it for yourself.

Microsoft (MSFT): Where Market "Fundamentals" Fail, Elliott Waves Prevail

September saw tech giant Microsoft Corp. in freefall, a rout ending September 30 at the stock's lowest level since March 2021. Oddly enough, the decline occurred amidst "fantastic" figures of growth and productivity. If you can answer the question, "Why did prices fall despite bullish 'fundamentals?'" you've got the job!


MSCI Taiwan, KOSPI: Looking at U.S. Dollar to Understand Stock Trends

The Asian-Pacific stock markets have been showing a clear correlation with the trend in the U.S. dollar. Watch our Asian-Pacific Short Term Update editor Chris Carolan explain why right now, it's a "very dangerous" moment for the regional stocks.