Elliot Wave Analyses Of The Bitcoin Sell-Off. Dump To $27K?

January 13, 2021

Current Bitcoin Data

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Key level to watch for on the Bitcoin 4-hour time frame

In our previous Bitcoin analysis Bitcoin Crash, Retracement, or Reversal? Big Move Coming!, we talked about the $34,653 critical resistance. And right now, the Bitcoin price is struggling at that price region unable to breakthrough.

Bitcoin unable to break through key level

In this Bitcoin analysis, we will be looking at the crypto price from another angle using Elliot wave analysis. We will also be making a bearish forecast for the Bitcoin price to potentially crash to the $27k region in the coming days.

Bitcoin Is Forming The 4th Wave In The Elliot Wave Series

Elliot wave analysis of the Bitcoin price on the 2-hour timeframe

We are starting the Elliot wave count from the previous ATH of $41,928.54. After making that high, the Bitcoin price crashed more than 25% in a matter of hours. This impulsive crash would be our 3rd wave in the Elliot wave count.

Elliot wave analysis of the Bitcoin price on the 2-hour timeframe

After we saw this 3rd wave crash, we saw a pullback up to the 50% Fibonacci level. This Fibonacci level serves as a key retracement level for prices to pull back to before continuing the prior trend which in our case is downward.

Elliot Wave Analyses Of The Bitcoin Sell-Off. Dump To $27K?
Elliot wave analysis of the Bitcoin price on the 2-hour timeframe

The fib retracement also coincides nicely with the $34,653 critical resistance we talked about at the beginning of this article. This creates market confluence and increases our confidence in a bearish trade setup.

Elliot Wave Analyses Of The Bitcoin Sell-Off. Dump To $27K?
Bearish divergence forming on the Bitcoin 2-hours chart

We are also seeing a bearish divergence occur further confirming the growing Bitcoin bullish weakness for the short term.

What Next?

Basic Elliot wave count

Well, an Elliot wave is made up of 5 key moves. We are currently on the 4th move, meaning we have one more leg to the downside before this move is completed.

Elliot Wave Analyses Of The Bitcoin Sell-Off. Dump To $27K?
Elliot wave bearish price prediction for the Bitcoin price on the 2-hour timeframe

If this sell-off occurs, there is a high probability that we might see Bitcoin crashing to the $29,000 or as low as the $27,000 region in the coming days.

Elliot Wave Analyses Of The Bitcoin Sell-Off. Dump To $27K?
Elliot wave 5th wave target for the Bitcoin price on the 2-hours timeframe

But for this sell-off to occur, the Bitcoin price must not break the $34,653 critical resistance which also servers as our 4th wave in this Elliot wave analysis. A price surge above that level invalidates this wave count. This makes that $34,653 region the best place to position your stop loss.

Key leve to watch out for on the Bitcoin 2-hours chart

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