Elliott Wave Analysis And How Bitcoin Dropped

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Hello traders and investors!

In this article we want to show you from a technical point of view and from Elliott Wave perspective why BTCUSD turned down.

On November 05 we have noticed slow price action and sideways wave structure after an impulsive move up, which usually suggests a corrective movement within wave 4. And because of contracting range, we labeled a triangle, corrective price action that was pointing higher into wave 5.

BTCUSD 4H Chart From November 05



Triangles occur in waves 4, waves B or waves X in complex corrections, but more importantly to know, triangles unfold just before waves 5, C or Y show up, which area actually the final legs that complete the higher degree trend, before a reversal occurs.

And as you can see, on November 11, BTCUSD sharply declined from projected target area after reaching wave 5, which is not a surprise as we know that in EW theory, after a five-wave cycle, a three-wave A-B-C correction follows.

BTCUSD 4H Chart From November 16


Notice that so far market made a very strong sell-off, even below the trendline support so the question is where we go from here? Well, so far a higher degree trend is still here, but if market goes below 50k then much more downside may come within a higher degree trends.

But more importantly we think traders should pay attention to gold/copper ratio and even stocks to be more confident into their crypto views. For more about this one make sure to check Grega’s video analysis from last week.