Bitcoin Elliott Wave Theory suggests BTC price can drop to $25.5K this year
The ongoing Bitcoin (BTC) price correction could continue as per almost a century-old technical analysis principle called "Elliott Wave Theory."
The interim bearish outlook put forth by the Elliot Wave Theory appeared as Bitcoin tumbled below $35,000 amid the Russia-Ukraine conflict.
The theory, which divides a price cycle into two sets—one consisting of five upward-trending impulse waves and the other having three follow-up corrective waves—points to the possibility of BTC's price dropping toward $25,500 in 2022.
At the core of its bearish outlook is its record of predicting cyclical tops and bottoms throughout the Bitcoin market's history, as shown in the chart below.
The Bitcoin chart shows three primary impulse waves (1, 3, and 5 in red) and two corrective waves (2 and 4 in red). The fifth wave is still in development, underscoring BTC's potential to reach above $100,000 in the future. But together, these five waves represent an upward structure that will likely exhaust at wave 5 and follow up with three corrective waves: A, B, and C.
Meanwhile, each large wave marked in red consists of sub-waves, featuring a five-wave advance (impulse) in the direction of the trend of one large degree (from 1 to 5 in black), followed by a three-wave corrections against the higher degree trend (from a to c in blue).
Between 2012 and 2018, Bitcoin's price has repeatedly rallied between wave 1 to wave 5 followed by a correction from wave a to wave c. Each time, wave c, which coincided with Bitcoin's 200-week exponential moving average (50-week EMA), marked BTC's price bottom and the completion of the so-called Elliott Wave Cycle, be it in 2015 or 2018.
Related: FTX CEO weighs in on Bitcoin market outlook amid Ukraine crisis
After 2018,
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