BTCUSD: The start of the 2024 bitcoin bull market

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2024-01-29

In September 2023 bitcoin commenced a sharp rally in an Elliott Wave third wave advance that culminated in early January 2024 in a new 52-week high at about 49000 dollars. This completed wave one of the five subwaves of the larger degree third wave.
Immediately following, the market pulled back to about 38.5 k points in a sharp decline typical of a wave two. The depth was limited by support from structural congestion in the middle of the prior rally, as well as the center line of the overall trend channel.

From the bottom of wave two, on January 23, 2024, the market initiated a new rally that commences the 2024 bull market.

This chart shows the new short-term trend channel that might take bitcoin back to the upper 48000s. Its genesis wave is a first wave that provides for measurement of the advance in terms of Fibonacci extensions. An initial estimate of the 1.618 multiple of subwave one has already been exceeded. So I am eying the 2.618 level now as a next intermediate target. This level conveniently intersects with the new trend channel at its top trend line.

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This rally is highly structured internally by Fibonacci relations, according to the rules of the Elliott Wave Principle.

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So by cursory inspection, it appears that the third wave has finally finished close to the upper trend line of that channel, almost exactly at the Fibonacci level of 200% of the first wave, which places it in the middle of my suggested range (1.618 to 2.618).
The peak in fifth wave of its subwave was swiftly followed by a correction to the bottom of the channel, from which we now expect a move forward to the top again, perhaps indeed to the mentioned 2.618 level. Chart later….

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Here is the new chart.

I am upgrading my target for the fifth wave to the area shaded in pink, which provides a 200% extension of black wave one in wave five. I think there might be less resistance between 45 and 47 k. It could end up anywhere in that range.

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The third wave market top came out in detail as follows:

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The bottom trend line of the channel got broken overnight by a small additional leg down, which is a little troublesome, because the trend line was so perfectly honored at first.
This raises the possibility that the fifth wave is already baked into the rally and I interpreted it wrong, or that the entire wave is only a B-wave of a more complex three-wave structure.

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This excursion below the channel trend line was quickly recovered.
The 44000 line is once again undr attack. It represents a demarcation of a liquidity gap to the top of the market with few structural features. The next target really would be an attack on the 52-week high.

The excursion below the trend line facilitated a relabeling of the fourth wave from an WXY double correction to an expanded flat, ABC.

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Since this is a fourth wave, we do need to consider a more complex correction, rather than just a sharp zigzag or flat. So, this could still take a while before it’s over.

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Indeed this has been developing. The retrace of the initial drop turns out to be a three-wave structure, an ABC. It is followed with a five-wave structure returning to the bottom to create a large ABC flar.

We have to wait and see whether this is enough of a correction. It would be easy to turn the last leg into a three-wave, and add the D and E waves for a triangle.

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In detail, the Elliott wave structure of the last wave pair (b and c) is as follows.
The three-part structure of b and the five-wave construction of c is clear.
Some people claim that Elliott wave cannot be used for trading. I don’t know how better to punish them than with the accuracy that this provides to explain and guide trading.

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Still looking at the opportunity here.
This consolidation may be done. If it is, the following impulse to 45.1 k seems reasonable as the next goal. Conveniently it is confluence with the previously eyed target of the 200% (2.00) extension, market with horizontal dotted line.

As of writing, the price is at the 0.618 level of the current Fib projection.

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200% or 2.00 should have been 261.8% or 2.618, sorry.

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To regain an overview:


It is possible the the awaited fifth wave is already in, in form of the previous to present peak, although it was just short of a new high.

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None of this looks terribly bullish today, to be honest. The wave started nicely, but the first retracement period seems getting longer to the side, and it all started kind of early on the trajectory.

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Now that we watched this chop for another day, it has become clear the market has developed into a flat correction, as shown in the following chart. All that remains is completion of the final wave C. Corrections can extend easily, though, but the longer this lasts the more energy the market has for its next move. 44 k is very close, and 49 k or even 50 k is just an easy jump up that could fall in the blink of the eye, through a region of low liquidity.

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I can count five waves down in the last leg down, on the 30 min or shorter time scales, and can detect a possible break of trend. This should be an alert that a reversal of trend is possible shortly. The high-low swings are down to less than $100, and this should warn us that we are close to a substantial move with a bias to the upside.

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The alert couldn’t have been more timely, as minutes later we saw the final push down of that c-wave, followed by trend reversal.in a sharp upswing.of some 300 points. Whether this is bullish remains to be seen.

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I am rather convinced we now have only waves one and two completed of wave c.
This should go down almost a thousand points to finish, much like I indicated in the last red line for the depth of the last leg.

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The market did go down a thousand points, and made another trip up and down with some beautiful Elliott waves. The market is now in a position of a completed expanding triangle, so we should look for a possible breakout from the sideways pattern.

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The market continues to be choppy in this sideways business. Here is a 4h idea of a possible count of the market right now, showing the possible completion of a large triangle formation in wave four.

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We need a solid break over 43.8 k, or better 44000 points, for confirmation.

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The triangle trend line has been broken three times in the resistance that developed there, as can be seen in the following chart.
It appears that this is real. W should look for further extension of the rally. It should be good to at least 44.5 k, or the 1.618 Fib extension.

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So this is the real deal of a breakout attempt. From Elliott wave check this rally has been extended, with double 1-2 formation, as base.
We should really expect more than the 1.618 multiple. So far, we had another pause at 1.414 level to complete a third subwave. This is a one-minute chart.

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Fib 1.618 reached and exceeded, with a consolidation pattern developing on too.
The 0.618 retracement level from the year high to bottom of wave 2 is under attack, or already taken out depending on logarithmic versus linear fibs., but this is not a structural landmark. The market should begin to feel some increased resistance to taking out the top.

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Having advanced further, Indeed, runs are getting shorter, but the market finds ways to add wave sequences in smaller degrees at the top to delay closure of the largest third waves that started at the base. It is entirely possible to fill the remaining distance to the year-high.

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In its upper stages, this rally has found new energy and has penetrated the 46 k range, from where there is very little chart resistance.
The 0.786 fib retracement level of the decline from year high is under attack, which is in confluence with the 3.414 extension of the base wave from 42.3 k of the entire rally, as previously referenced along the way.

This 1H chart gives an overview of the major wave degrees of the rally.

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At the current top of the market the following structures appear to support a clear run to a new year high, on the one-minute chart.

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About 47.7 k. There is no chart resistance left other than the January high, 1200 points away. The price action has essentially gone parabolic over the last few hours. If my count is correct BTC has one more correction (fourth wave) ahead before final ascend in this large wave of about 9000 points.

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The upper line of the major trend channel from the 2022 bottom up, which helped limited the January high, is now coming in at about 50.5 k. I suspect that it will also be a factor in coming days, and trigger a short retrace.

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Based on my wave counts and their Fibonacci measurements, I have concluded that the main run, that is the third wave has finished. The market added a little since yesterday, trading above $48000, short of the January top by about 800 points. A minor correction followed (green wave iv) of less than 23.6% of wave iii.
Determining the end was also aided by the fact that the fifth wave of one lower degree was within 20 points of the size of its third wave. Equal size of wave one and five is a common occurrence, and I had marked this as a target.

In this chart I am marking the same relationship for wave five of the green sequence (Subminuette degree) for a target of the remains wave five to about $53000. But we have to be aware that the top of the long-term trading channel is sitting at the 0.618 Fib level right now (50.6 k), so it could just stop there.



This will also conclude Minuette wave (v), the large black wave from the 38.5 k bottom of this rally. This entire run constitutes wave one of one larger degree, Minute ((I)). Therefore we should see a substantial correction of several thousand points, back into the mid 40 k range, or at least to the January peak, which will then be a support line.