In our recent analysis of the world's largest cryptocurrency, we outlined three potential scenarios based on Elliott Wave Principle (EWP). We can now narrow these down to two primary possibilities, and the updated outlook reveals some compelling signals.
All major technical indicators previously suggested that Bitcoin was seeking a bottom around the $25,000–$24,500 support zone before initiating a meaningful rebound. The initial bounce was expected to be relatively brief, targeting the $29,500–$30,500 range. A sustained breakout above that resistance, however, could signal the beginning of a stronger mid-term rally with significantly higher potential targets.
Looking back, Bitcoin’s price dropped to a low of $24,919 on September 11, followed by three consecutive days of gains — marking the longest winning streak since the rally to $31,839 on July 13. This supports the view that Bitcoin found a local bottom near our ideal target zone and is now positioned for a potential reversal. As the market structure develops, we anticipate moves beyond these levels.
More importantly, longer-term cyclical patterns indicate that a significant low was established in December 2022. Let’s break down what the charts are telling us.
Interpreting the Elliott Wave Count
A closer look at the daily chart suggests Bitcoin completed its first impulsive wave (Wave i) from the November 2022 low to the July 2023 high. The price action since then appears to be part of a corrective Wave ii, which ideally subdivides into three smaller waves (a-b-c).
- Wave a (in green) likely concluded recently.
- Wave b could target around $29,500 (give or take).
- This would be followed by Wave c, ideally finding support between $21,700 and $23,600.
Once this Wave ii correction is complete, Wave iii could begin — a powerful impulsive advance that may eventually propel Bitcoin into new all-time highs. There is, however, an alternative EWP count (labeled alt: ii on the chart) in which the entire correction may already be over.
Beyond Elliott Wave: Cyclical Analysis
Why are analysts turning increasingly optimistic? The long-term price trend of Bitcoin reveals a recurring four-phase cycle tied to its halving events:
- Early Bull Market: The phase just after a halving or major low.
- Mid Bull Market: A period of strong upward momentum.
- Late Bull Market: The euphoric peak phase.
- Bear Market: The subsequent decline and consolidation.
Each full market cycle (illustrated by green arcs on the chart) has historically lasted approximately four years. Each significant high or low (blue arcs) tends to occur about one year apart. Notably, every major bear market bottom has occurred in the final month of the fourth year — the last one being in December 2022.
Following these bottoms, the early bull phase typically peaks around six months later. Another six months (plus or minus three months) after that peak often brings another significant low, launching the mid-bull phase. This pattern has, so far, held consistent.
Applying this model to today’s market:
Bitcoin peaked almost exactly six months after its December 2022 low (from November 21, 2022, to July 13, 2023). If the pattern continues, we should expect a low to form around December 2023 (±3 months). This suggests two possibilities: the low was already established on September 11 (supporting the alt:ii wave count), or the ongoing a-b-c correction will extend into December before the next bull run begins.
Key Resistance and Support Levels
While past performance doesn’t guarantee future results, the current technical setup offers clues. For the immediate bullish count to be validated, Bitcoin must hold above the November 2022 low and break through key resistance levels.
The recent bounce from the precise support zone we identified is technically significant. It indicates that the market is, at a minimum, in a counter-trend rebound. The critical question remains: was that the final bottom, or is one final dip toward the $21,700–$23,600 area still pending?
According to Bitcoin’s established cyclical rhythm and phase analysis, the cryptocurrency is likely nearing the end of its corrective phase and may be on the cusp of a new bull market. 👉 Explore more strategies for tracking market cycles
Frequently Asked Questions
What is the Elliott Wave Principle?
The Elliott Wave Principle is a form of technical analysis that identifies recurring fractal wave patterns in market prices. These patterns help analysts forecast future market movements by distinguishing between impulsive (trending) and corrective (counter-trend) waves.
How does Bitcoin's halving affect its price cycle?
Bitcoin’s halving event, which reduces the block reward for miners, occurs approximately every four years. It has historically preceded major bull markets due to the resulting supply shock, which creates a cycle of anticipation, price increase, euphoria, and eventual correction.
What are the most important support levels for Bitcoin?
The key support zone to watch is between $21,700 and $24,500. A sustained break below this range could indicate a deeper correction, while holding above it, especially after a retest, would be a strong bullish signal.
Could macroeconomic factors disrupt these technical patterns?
Yes, technical analysis operates within a broader macroeconomic context. Factors like interest rate decisions, regulatory news, or global liquidity conditions can accelerate or disrupt technically derived forecasts. Always consider both technicals and fundamentals.
How long does a typical Bitcoin market cycle last?
A full cycle from one bull market top to the next, or from one halving to the next, has averaged about four years. However, each phase within the cycle can vary in length and intensity.
What is a leading diagonal in Elliott Wave terms?
A leading diagonal is a specific five-wave impulsive pattern that occurs in Wave 1 or A. It is characterized by overlapping waves and a wedge shape and indicates that the larger trend is just beginning.