Bitcoin’s recent retracement to $38,000, accurately predicted by analyst Markus Thielen of 10x Research, has led him to identify levels above $43,000 as optimal for new bullish positions on the cryptocurrency. Thielen emphasizes that reversal indicators are signaling a tradeable low, directing attention towards long positions.
Thielen’s optimistic outlook is rooted in the Elliot Wave theory, a model that interprets price movements as waves, allowing predictions based on repetitive wave patterns. According to this theory, trends evolve in five waves, with 1, 3, and 5 representing “impulse waves” indicating the primary trend, while the rest are “retrace waves,” signifying temporary halts.
Bitcoin has displayed a five-wave bullish pattern since early last year, with the recent pullback from approximately $49,000 to $38,500 constituting wave 4 or a temporary retracement. Thielen now suggests that wave 5 has initiated, potentially propelling prices beyond $50,000.
“Elliott Wave analysis has also labelled this retracement to 38,522 as wave (4) with a wave (5) projection of 52,671 – potentially by the end of Q1, 2024,” Thielen noted.
The positive outlook aligns with reduced selling pressure from investors securing profits in the Grayscale Bitcoin Trust (GBTC), a contributing factor to bitcoin’s wave 4 correction following the launch of U.S.-based spot ETFs on Jan. 11.
Thielen identifies potential catalysts for an upward move, including the diminishing impact of Grayscale GBTC selling on bitcoin’s price, new all-time highs in stocks, and Google allowing Bitcoin & Crypto ETF advertisements. At the time of writing, Bitcoin trades at $42,160, reflecting a 0.3% gain for the day.
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