Now that we have more data and a potentially more accurate wave count, let's revisit an old market cycle price target forecast I made earlier this year/late 2020.
(August 3, 2021 8:30PM EST)
I still hold that we have not yet seen a market cycle top. Why? Several reasons:
On-chain analytics shows HODLers and whales continue to accumulate, as well as retail, which typically drive bull markets. Few are selling.
Bitcoin typically reaches a cycle top well over a year after each halving. The most recent halving occurred in May 2020, meaning we likely won't see a Bitcoin market cycle top until at least H2 2021, or possibly H1 2022. In the previous cycle, Bitcoin halved in May 2016, resulting in a market cycle peak 511 days later in Q4 2017. If the theory of lengthening cycles holds true or we simply match the length of time for a cycle peak again, then that would bring us to a cycle peak in Q4 2021 at earliest.
Elliott Wave Count
As you can see in the chart above, we likely completed a long-term Wave 1 at $65K, then retracing very close to the standard corrective Wave 2 61.8% fibonacci retracement, often referred to as the 'bear trap.'
This shakes out the weak hands who sell low (around $30K) before the ultimate impulsive wave 3 rally, which we could be in the early innings of now.
Typically, impulsive Wave 3s are the longest waves (though not always), and are often measured as 1.618 of W1. Based on a W1 start at the March 2020 low of ~$4,800, this would bring a standard W3 termination at roughly $120K before a W4 correction. This aligns closely with Pantera Capital's Dan Morehead who has gone on record to suggest a $115K Bitcoin price in Q3 2021. If the W3 is extended, we could see a 2.618 extension of W1, bringing BTC to $155K before a W4 correction to $90K - $100K.
I tend to think that if any impulsive wave will be extended, it will be Wave 5 as that's usually when sentiment is the most bullish and when novice investors tend to FOMO into long positions at extreme levels, further extending an already overextended rally. This could again be the most unpredictable impulsive wave as we could see a premature top around $155K, a somewhat extended rally to $200K, or an extreme blowoff top around $260K - $270K, and some talking heads even predict a $300K price target.
I think this is highly optimistic and less probable, but it very well could happen. Look at 2017; many expected significant resistance at $10K. What happened? Bitcoin breezed through $10K, hitting $20K weeks later in what turned out to b, the ultimate market cycle top. No one knows what the price will be and when, but I think this data gives us an idea where it might be smart to place some buy orders or take profit.