Bitcoin appears to have endured a solid year thus far. In February, for example, the world’s number one digital currency by market cap hit a six-month high of about $25,000, thus having expanded its price by roughly 50 percent since the end of 2022. For the most part, everything appears to be looking up for BTC, but there are still some detractors that believe the currency is trapped in a bearish pattern.
Bitcoin May Not Be In Holly-Jolly Land Yet
One such detractor is QCP Capital, a crypto options trading company based in Singapore. The firm recently released a report claiming that the digital asset was merely experiencing a “bear breather” with its recent price jumps. This means that while there have been a few hikes here and there in recent weeks, the company is not convinced the currency is completely out of the woods yet.
The analysis of QCP stems from what’s known as the Elliott Wave Theory. It first appeared in 1938 in a book by Ralph Nelson Elliott called “The Wave Principle.” It suggests that by observing repetitive patterns in an asset, one can predict future price movements. The theory goes even further by saying that waves one, three, and five of every asset’s movements can be referred to as “impulse waves,” which means they represent primary trends.
From there are waves two and four, which represent “retrace waves.” This means that whatever’s occurring in the one, three, and five waves will disappear for a short while and give the asset in question a break from what’s been occurring. However, two and four tend to be only temporary, and five – the final wave discussed in the theory – will often bring the discussed asset back to its original form and price patterns.
Right now, QCP says bitcoin is enduring wave four, meaning it’s enjoying a nice break from the previous bear trends it’s been experiencing. However, there is still wave five to be had, meaning bitcoin could again fall to the lows it saw in November and December of last year. The company said in its report:
A potential double top is forming against the August 2022 correction high, and May 2022 reaction is low at $25,300. Above that, we have the huge $28,800 – $30,000 resistance, which is the head and shoulders neckline. Until these levels break, our five-wave count still remains valid, with a final wave five lower to come.
Is the Asset Going to Fall Again?
2022 was easily the worst year for crypto and bitcoin. The latter asset fell by more than 70 percent from its November 2021 high of about $68,000 per unit.
Just 12 months later, the currency fell into the high $15K range, though slight recovery occurred in the following weeks and the digital asset ended 2022 in the mid-$16K region.
