Bitcoin Analysis

9:05 a.m. New York time

What’s happening now? Bitcoin ended the first leg of an upward correction and has now begun the downward second leg.

What does it mean? I expect the present decline to remain above the June 22 low of 28,800 and to be followed by a significant rise in the third leg of the correction.

What’s the alternative? It’s possible that the September 6 peak was the end of the correction and that the downtrend that began on April 14 has resumed. If that’s the case, then I expect significant new lows.

[Bitcoin futures at 9:04 a.m., 5-hour bars]

What does Elliott wave theory say? The September 6 peak marked the end of wave A of Submicro degree within wave 2 of Micro degree, an upward correction within wave 1 of Subminuette degree, the early steps in a major downtrend that began on April 14 with the end of a series of 5th waves of increasingly higher degree, up to Minor degree.

The decline after Submicro wave A is wave B, the middle wave in a three-wave corrective pattern. It will be followed by Submicro C, whose completion will end Micro 2 upward correction and begin wave 3 of Micro degree, which will carry the price to significant new lows.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, September 8, 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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