Bitcoin price is struggling to maintain above $20,000 per coin — a level that few expected the top cryptocurrency to trade at ever again once it passed the key resistance the first time.
In a new prediction, the next target for BTCUSD might also reach a level that very few at this point would consider or expect. However, ages-old mathematics and Elliott Wave Theory could suggest the next cycle may possibly peak much sooner than many would believe — and at price of $161,800 per coin.
Finding Price Targets With The Mysterious Power Of Fibonacci
Cryptocurrency traders commonly use Fibonacci retracements and extensions to make decisions about where and when to buy or sell. It isn’t known why prices tend to gravitate toward these levels, but the ratios are found all throughout the natural world.
For example, Venus orbits the sun in 224.6 days, while Earth at 365.2 days. This creates a ratio of 8/13 — both Fibonacci numbers — which is roughly 0.618. This is precisely why the golden ratio is also referred to as the divine proportion. It’s almost magical.
Fib ratios are derived from the Fibonacci sequence — a series of numbers where the next number in the sequence is the sum of the previous two numbers. The sequence reads 0, 1, 1, 2, 3, 5, 8, 13, 21, and so on.
Although the sequence is named after the famous Italian mathematician who popularized it, its use dates back to 200BC Indian mathematics. Simply put, this is about as ancient of math as it gets.
BTC reached the 1.618 Fibonacci extension several times during the cycle | CME-BTC! on TradingView.com
Examining Market Cycles With Elliott Wave Theory
Ralph Nelson Elliott developed Elliott Wave Theory in the 1930s, yet the study could be the key to figuring out what’s going on with Bitcoin.
Elliott Wave Theory believes that market cycles move in five primary waves, with waves one, three, and five moving with the trend, and waves two and four moving against it as corrective phases.
Relationships with Fibonacci are everywhere in Elliot Wave Theory. Impulse waves up tend to fizzle out at Fib extensions, while corrections terminate at Fibonacci retracement levels and extensions.
A five-wave motive wave completes one cycle in five individual waves with three impulses and two corrections. A complete Elliott Wave sequence consists of 21 movements and there are 21 total corrective patterns. Each of the numbers are Fibonacci numbers.
Bitcoin's fifth wave might be about to begin | CME-BTC! on TradingView.com
Why Bitcoin Could Reach $161,800 Per Coin
With all that background out of the way, we can focus on Bitcoin price. As a speculative asset, it’s especially susceptible to emotion-driven price movements, making it especially responsive to Fibonacci ratios and Elliott Wave Theory.
Using the BTC CME Futures chart, it is possible to count out a Bitcoin Elliott Wave motive wave still in progress. If the wave count is accurate, it’s possible to project a possible end to the motive wave and bullish cycle by using a Fibonacci extension target.
Bitcoin price could reach the 1.618 Fibonacci extension, which is roughly $161,800 per BTC. Interestingly, if you multiply $100K by the golden ratio, you’ll get $161,800. The top cryptocurrency touched the golden ratio target at the 2021 peak when Fibonacci extensions are drawn from the very open of the BTC CME chart to the 2018 bear market bottom.
The target is contingent on Bitcoin price having ended its wave four expanded flat correction and started its wave five impulse. While wave fives tend to match wave one in magnitude and strength, they can also mimic wave three — which tends to be the longest and strongest.
In Search Of Cyclical Confirmation In Crypto
In the video above, Tony “The Bull” walks step-by-step through each wave count in Bitcoin and uses textbook Elliott Wave examples to explain how the price action could develop.
In the exclusive in-depth analysis, each wave terminates at a key Fibonacci level, dating back to the beginning of the Bitcoin bear market. Using a channeling technique to project the next cycle peak, it is possible that the bold target is reached within the next six months to a year.
Finally, the cyclical nature of BTC is possibly further confirmed using Hurst Cycle Theory, which suggests a near-perfect cyclical rhythm of bottoming since 2015. Each major bottom also took place within a logarithmic buy zone and each cyclical top in its sell zone.
The Fisher Transform is then used to possibly provide confirmation of the presence of yet another significant turning point in BTCUSD — and possibly the last bullish impulse before the cycle comes to and end.
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— Tony “The Bull” Spilotro (@tonyspilotroBTC) January 19, 2023
Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice. Featured image from iStockPhoto, Charts from TradingView.com