Bitcoin Elliott Wave: Unfinished Bearish Business

Executive Summary

• Bitcoin has fallen 28% over the past month.
• The downtrend appears to be incomplete with more new lows.
• A rally above $68k would increase the chances a more meaningful low is in place.

The announcement of several IPOs has drawn renewed interest in the equity market. SpaceX, Anthropic, and OpenAI have announced their intention to go public. Even Google chimed in on the matter announcing an $85 billion capital raise, the largest public stock sale in history. Investors are going bonkers for AI stocks. This has created a drag on Bitcoin as capital flees the crypto currency to flow into AI.

Incomplete Elliott Wave Pattern

Bitcoin’s price has fallen 28% over the past month to reach a low of $59,111 on June 5. The pattern we are tracking is a bearish Elliott Wave impulse pattern. The pattern appears to be incomplete with Friday’s low counting as wave iii of (iii). This implies a couple more 4’s and 5’s to the downside are around the corner.

The rally since Friday would be wave iv of (iii) and could reach $65,750, but it doesn’t have to. Within an extended 3rd wave, the 4th wave tends to retrace to the Fibonacci 38% of wave 3, which is near $65k.

If Bitcoin were to rally above $68k, then we’ll begin to consider other alternative patterns, such as the double zigzag listed in red labels on the chart.

Until then, consider the Bitcoin trend to be down and we anticipate new lows below 58,111 in wave v of (iii).

After that trend, another rebound could carry Bitcoin back up near current price levels at $63k.

Bottom Line

Bitcoin appears to have be within an incomplete bearish impulse pattern. The current rally from Friday is anticipated be a partial correction higher followed by a couple more jabs to new lows below 59,111. 

If Bitcoin rallies above $68k, then we’ll need to consider other alternative wave counts.