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In our earlier update from three weeks ago (see here), when Bitcoin (BTCUSD) was trading around $104K, we determined, based on the Elliott Wave (EW) Principle, that “an ongoing corrective 4th wave targeting $86-101K from which a rally to $164-216K can still occur.”
Fast forward to Friday, November 21, as BTC bottomed out at $80K. Not a bad call, considering it has now staged an >10% rally, which is the biggest in percentage since its October 27 bounce high at $116,395. Thus, so far, Bitcoin can still very well be counted as being in the 4th wave: red Wave-iv. See Figure 1 below.
Figure 1. Bitcoin’s long-term Elliott Wave count since December 2013, with its four-phase cycles.
At its recent low, Bitcoin dropped about 37%, retracing just over 31.8% of the previous 3rd wave. Also, from Figure 1, we see that the last two 4th waves before major highs (2017 and 2021) caused BTC’s price to fall by 40% and 56%, respectively, and to retrace between 31.8% and 61.8% of the earlier 3rd waves.
Meanwhile, the Bitcoin Fear and Greed Index has stayed below 15 (extreme fear) since November 13. In our last update, we noted that such extremes usually happen at major lows (December 2018, March 2020, June-July 2021, July-August 2022, August 2024, and March 2025).
So far, all Bitcoin has experienced is a healthy pullback within normal bull-market limits. It also remains within the boundaries of its four-phase cycle, which lasts about four years, plus or minus two to three months.
So, what other evidence can we find to support the bull market case? Here, we will analyze the yearly candles. This is something you won’t find elsewhere because most people are too focused on small fluctuations. However, the EW tracks mass sentiment, which is better captured by longer time frames, not shorter ones. See Figure 2 below.
Figure 2. Bitcoin’s Yearly Candles since 2011.
Note that Bitcoin was created in 2009 and began trading more openly in 2011. Therefore, we only have 15 years of data, which isn’t enough to draw strong, statistically significant conclusions. In comparison, the Dow Jones has been trading since 1874. But we must work with what we have. And here’s what we can see:
- There have so far been only seven waves up, whereas impulses move in sequences of 5, 9, 13, etc. Therefore, we should expect at least an eighth and a ninth wave.
- The pattern has been 1 down year (’11), 2 up years (’12-’13), 1 down year (’14), 3 up years (’15-’17), 1 down year (’18), 3 up years (’19-’22), 1 down year (’22), and 2 up years (’23-’24). So far, 2025 is down.
- But, waves 1, 3, and 5 all ended with up years. The current W-7 top is a down year. If this pattern continues, a yearly close above the 2024 close of $93381 is needed to resolve that issue, which will also mark a “3 up years pattern (’23-’25).
- Waves 2, 4, and 6 bottomed out at 78.6-88.6% retracements of their previous waves, specifically the 1st, 3rd, and 5th (blue boxes). Once W-7 is completed, we should expect the same retracement for W-8.
Thus, annual patterns indicate that December will likely be an up month, resulting in a positive close for 2025, which requires the price to stay above $93381 by December 31. Additionally, the four-phase cycle suggests BTC might reach its peak at the end of January or February 2026.
Focusing on one last piece of evidence, we see that the daily MACD is at its lowest point. The previous two lowest readings occurred in May 2021 and March 2025. See Figure 3 below.
Figure 3. Bitcoin’s daily chart since 2014 with its MACD.
Although the sample size (n) is only two, in both cases the downside risk was small (14% and 3%), while the upside potential was large (96% and 60%). Therefore, lower prices can still be expected currently (around $74±2K), but the upside reward is much greater as the previous percentage gains indicate BTC could reach $128K to $157K, nearing the long-standing target of $164K.
Therefore, comprehensive multi-faceted analyses of the yearly, monthly, and daily charts suggest that there is potential for further decline to around $74000 ± $2000, but December should at least close above $93381, and a cycle top early next year near $164000 remains a strong possibility. If December closes below its $93381 cutoff, the next two to three years are expected to be up years because Bitcoin has thus far not experienced subsequent down years.