Elliott Wave Theory is just one of many tools cryptocurrency analysts and Bitcoin traders use to help them predict future market movements and gain a competitive edge.
According to the commonly used technical analysis principle, Bitcoin could be due for its biggest correction yet – one that will take the crypto industry by surprise and cause mass capitulation.Elliott Wave Theory Explained
In the early 1900s, professional accountant discovered that market prices move within certain patterns based on investor psychology, called “waves.”According to Elliott, humans are “subject to rhythmical procedure,” and because of this, “calculations having to do with his activities can be projected far into the future with a justification and certainty heretofore unattainable.” In more simple terms, because human behaviors are cyclical, the impact these behaviors have on the market and market price of assets like Bitcoin are also cyclical, and thus, predictable.
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While the principle is commonly used throughout various financial markets including cryptocurrency with much success, the practice of Elliott Wave Theory has its share of naysayers.ABC Correction Puts Bitcoin Price Target Below Current Bear Market Bottom
How does all of this apply to Bitcoin? Well, according to one analyst’s take on Bitcoin price charts and how it applies to Elliott Wave Theory, Bitcoin price completed the final wave 5 at the crypto bubble peak back in 2017 and has just completed wave B in an ABC corrective wave as Bitcoin reached a top during the 2019 rally in late June.
If Bitcoin does break below the current bear market bottom and head towards $1,000 as Elliott wave Theory appears to suggest, the crypto industry would be in shambles, with many companies and projects going bankrupt as a result. Crypto investors would capitulation en masse, and the asset class could be considered dead for good.
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However, some analysts say that this is necessary for the crypto market to once again blossom into a full-blown bull run.