Bitcoin Analysis

3:15 p.m. New York time

What’s happening now? Bitcoin futures continued the upward push that began on January 27 from 29,075, reach a high today (so far) of 56,235.

What does it mean? The rise since late January is the final leg of an uptrend that began on December 14, 2018 from 3120. It’s end will trigger a significant downward movement over the next few weeks and months, composed of the usual pattern of rises and falls.

What are the alternatives? The upward sprint from February 10 has fulfilled the minimum requirements of Elliott wave theory. Today’s high could be the end of the rise, or there could be more upside potential.

[Bitcoin futures, 135-minute bars, with volume]

What does Elliott wave theory say? The end of the rise will complete fifth waves all the way up to Primary degree, the degree that began in December 2018. If the ensuing decline is a correction, then the price over the long haul will remain above the December 2018 low of 3120. If the decline is a new downtrend, then the price will break below that level, although it will take significant time for that to happen.

Learning and other resources. Elliott Wave International has long been the leading analytical house based on Elliott wave theory. They make available a number of free educational materials and other resources, in addition to their for-pay subscriptions.

I recommend two books, both by people associated with EWI.

First, Elliott Wave Principle by Robert Prechter and A.J. Frost is the book that, along with Prechter’s analyses, that created the revival of Elliott wave theory. I first read it in 1984, and it has had a profound influenced on my thinking about markets ever since.

Second, I’ve found Visual Guide to Elliott Wave Trading by Wayne Gorman and Jeffrey Kennedy, both of EWI, to be a useful book that relates Elliott wave theory to practical trading. The authors are hands-on Elliotticians, and for an active trader, that’s exactly what’s needed — less theory and more how-to. The first chapter of the book gives a very nice thumbnail run down of what Elliott wave theory is all about.

Terminology. Here are some links to information about some of the technical jargon I use.

Charts. On my charts, waves have a subscript showing the degree above or below the Intermediate degree. Here are the subscripts and the degree each represents:

  • {+3} Supercycle
  • {+2} Cycle
  • {+1} Primary
  • No subscript: Intermediate
  • {-1} Minor
  • {-2} Minute
  • {-3} Minuette
  • {-4} Subminuette
  • {-5} Micro
  • {-6} Submicro
  • {-7} Minuscule

By Tim Bovee, Portland, Oregon, February xx, 2021


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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