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In this episode of NewsBTC’s daily technical analysis videosUsing Elliott Wave Theory, we investigate exactly how Bitcoin dropped to the 1,618 Fibonacci extension.
Watch the video below:
VIDEO: Bitcoin Price Analysis (BTCUSD): September 29, 2022
Has Bitcoin bottomed at the golden ratio?
In Elliott Wave Theory, corrections come in ABC patterns. Using the Fibonacci retracement tool to draw from the bottom to the top of the A wave will give you a Fibonacci expansion target for where a C wave correction could end up. The pit to $17K exactly hit the 1,618 Fibonacci with pinpoint accuracy.
1.618 is the golden ratio, also called the divine proportion.
Bitcoin downtrend stops at precisely the golden ratio | Source: BTCUSD on TradingView.com
Bear Market Past Bottoms Locate with Golden Accuracy
Shocked by this discovery, we used the same strategy to investigate the 2018 bear market. Look, the target ended up on the golden ratio once again. To demonstrate this, we drew the descending triangle of the B wave and took the Fibonacci extension from the bottom of the A wave to the top where it started. As you can see, this perfectly projected the bottom of the bear market.
Zooming out further, could this have happened in the bear market of 2015 as well? By adding another ABC correction, the same pattern fits, albeit not as exactly, with the rest of the analysis. Still, it’s accurate enough where the golden ratio can clearly be a factor in where Bitcoin eventually bottoms out.
Can Fibonacci Project The Next Big Spike In Crypto?
We now know that projecting extensions of the A wave gives us the C wave bottom… hopefully. But how does this work if you project a target upward? Drawing from the peak of 2017 to the bottom of the bear market, the top of the 2021 bull market was projected.
If the same holds true for the next bull market, as every bear market has repeated, the golden ratio could push Bitcoin to a price above $161,000 per coin.