The Bitcoin (BTC) price has been trading in a range between $27,000 and $28,000 since Friday last week, with $27,800 currently being the most important resistance level to kick off a move to the upside. As recently as last Tuesday, BTC was trading above $30,000 before plunging more than 10%.
However, Wyckoff and Elliott Wave analysts agree that the move is not a cause for concern. According to trader and market psychology coach Christopher Inks, a minimum target of $42,350 is for Bitcoin as part of its next bounce.
Here’s What Wyckoff Analysis Says About The State Of Bitcoin
The Wyckoff method was invented by Richard Wyckoff in the early 1930s and proposes to read the market using causal fundamentals that actually predict market movements. The accumulation and distribution schemes are probably the most popular part of Wyckoff’s work in the crypto and Bitcoin community.
The models break down the accumulation and distribution phases into five phases (A through E), along with several Wyckoff events. Inks writes in his analysis that Bitcoin is most likely in an accumulation according to the Wyckoff method.
“The Elliott Wave count may or may not be correct locally. We want to see an impulsive breakout above that ascending red dashed resistance to signal that the wave ((ii)) flat structure may be complete, but a breakout above wave (b) is required to add confidence to that count,” writes Inks, who shared the chart below.
Bitcoin Wyckoff and Elliott Wave | Source: Twitter
If Inks’ count is correct, then another breakout has the daily pivot as its target. This means that the wave ((iii)) of 3 from here has a minimum target of $42,350 per Bitcoin. According to the analyst, this theory is also supported by the fact that the RSI on the daily chart is currently showing a hidden bullish divergence, with confirmation that it is complete still pending.
In addition, the Stoch RSI on the daily chart has moved back into the oversold area, so a breakout from the oversold area would further support the assumption that the wave ((ii)) is complete, the analyst says and concludes:
We can also note the red parabola. While price remains above that curved line we should continue to expect higher, overall, rather than a larger pullback. Let’s see if we can get that rally from somewhere around this area.
Todd Butterfield of the Wyckoff Stock Market Institute agrees with Inks. In his latest analysis, Butterfield writes that Bitcoin experienced a sharp sell-off on low volume last week – as expected.
This is “another low-risk buying opportunity,” according to the renowned analyst. The technometer is at 38.5 for BTC/USD and 40.4 for BTC/USDT. Via Twitter, he :
Bitcoin has not reached oversold and the price action had me staying on the sidelines for a moment. An oversold Technometer is not a close your eyes and buy, but an indication that we could be forming a bottom, or due for some sideways/higher.
At press time, the BTC price stood at $27,236, moving once again closer to the lower end of the range, probably for one more sweep of the low.
Bitcoin price, 4-hour chart | Source:
Featured image from iStock, chart from TradingView.com
Jake Simmons, a dedicated crypto journalist, has been passionate about Bitcoin since 2016 when he first learned about it. Through his extensive work with wncen.com and Bitcoinist.com, Jake has become a trusted voice in the crypto community, guiding newcomers and seasoned enthusiasts alike towards a deeper understanding of this dynamic field.
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