Over the past three weeks, since Bitcoin hit $3,800 in a capitulation event, the cryptocurrency market has mounted an extremely strong recovery. In fact, just the other day, the cryptocurrency shot some 10% higher within a few hours’ time, rallying from $6,600 to $7,200 in a strong upward swing that liquidated dozens of millions worth of short positions.
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The price action has convinced many that a bottom is decisively in for the digital asset market, especially considering that the macro trends continue to favor Bitcoin. But, according to an eerily accurate trader, this is unlikely the case.
Is the Bitcoin Bottom In?
The past few weeks have undoubtedly been positive for Bitcoin; the cryptocurrency has established a series of higher lows and higher highs, showing the hallmarks signs of a forming uptrend.
But, according to crypto trader Smart Contracter, when looking at Bitcoin’s chart through the perspective of Elliot Wave analysis, it still seems somewhat bearish. He shared on April 3rd:
“[T]heres [sic] so many different ways you could count BTC here: either wxy, larger triangle, larger flat, I’m not too sure, the one thing that does stick out is the series of 3 wave moves and lack of 5 wave motives. [F]or this reason, I think its still too early to call a bottom.”
theres so many different ways you could count btc here.
either wxy, larger triangle, larger flat, im not too sure, the one thing that does stick out is the series of 3 wave moves and lack of 5 wave motives.
for this reason i think its still too early to call a bottom pic.twitter.com/WNBxJEcOdF
— Bluntz (@Bluntz_Capital) April 3, 2020
His sentiment was corroborated by other Elliot Wave-focused analysts, who explained that Bitcoin’s recent rally on declining volume looks “corrective,” suggesting a reversion lower is growing more and more likely as time elapses.
Previously, Smart Contracter suggested in mid-March that Bitcoin would fall back to the 2018 lows of $3,200 by the end of the month.
Good Track Record
While many crypto investors are skeptical of the validity of Elliot Wave analysis, Smart Contracter has a strong track record in analyzing the ever-volatile cryptocurrency markets, giving credence to his commentary.
In the middle of 2018, when Bitcoin was in the midst of a bear market, the trader remarked that he expected the asset to find an ultimate bottom at $3,200:
“I’m calling a bottom at exactly 3.2k with a 200 dollar leeway either side.”
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By the middle of December, his forecast was proven to be right when Bitcoin plunged from $6,000 to a low of $3,150 over the span of a few weeks, then established a macro bottom at that level.
Furthermore, he predicted shorter-term price moves over the past few months, like forecasting some of Bitcoin’s strength early this year and the crypto market’s precipitous drawdown in mid-February.
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