Bitcoin: August Aggregate Overview

2021년 8월 5일

Hello and welcome to my in-depth Elliott wave Bitcoin technical analysis. Currently, it seems to me that we are in a 4th wave irregular flat correction. This means that the previous aggressive price movement was a bearish relief rally, and in the next month or more we should see bearish price action and consolidation.

In an irregular flat correction, it is common for the height of impulse wave B to equal the distance between the bottoms of waves A and C. If this occurs, we can expect to see a wave C bottom around September 8th.

Since this a bull market irregular correction, the wave A bottom should be higher than the wave C bottom. If wave C does indeed go lower than wave A, the next area of support for Bitcoin is between $24 – 23k. I think it would be exceedingly unlikely for Bitcoin to break 23k.

If Bitcoin follows my multi-month Elliot Wave TA, then there is a 70% chance for Bitcoin to reach a 5th wave top between $63 – 84k. There is also a 15% chance for Bitcoin to top between 85k - 118k, and a 15% chance to top between 50k - 62k. So, although there is still a chance for the Bitcoin moon-boy 100k end-of-year price prediction, it is more likely we see a top between the all-time high and 84k.


Why do I think this is a bearish relief rally?

Bitcoin on-chain metrics show immense profit taking amidst this rally. $2.09 Billion in realized profits were taken in the past week. This indicates exit liquidity and an increase in Bitcoin’s short-term available supply (not long term supply, because as I explain later, exchange outflows are still increasing).

Who is selling?

It seems the majority of Bitcoin sold this rally came from old coins held between 1 – 2 years, 2 – 3 years, and 3 – 5 years. This points to an increase in recently bought Bitcoin, and a decrease in conviction to hold Bitcoin by old hands. From the Glassnode charts I have access to (which I cannot seem to post here) the current sell pressure we are seeing from hodlers is similar to the levels seen in September 2020. To me, this means the recent price action was a relief rally – some old hodlers took profits – and overall Bitcoin will remain in a bearish accumulation phase.

Bullish Factors

Although the recent sell pressure from hodlers is bearish, there are a number of factors that show this accumulation phase MAY only last a few months, then we return to a bull market. For one, the flow of coins out of exchanges has not been this high since November of 2020 (near the start of my multi-month Elliot wave bull cycle). This shows a steady decrease in available Bitcoin supply.

And two: The average buy in price for the average Bitcoin investor over the past 12 months is 37.3k per Bitcoin. This means that for the average hodler who wants to accumulate Bitcoin, Bitcoin is on sale under 37k, meaning the average rational hodler is inclined to buy under 37k.

Conclusion

Overall, Bitcoin is looking healthy after such a heavy bull market. The main question is how long will we accumulate before we see a breakout. Hopefully Bitcoin follows my Elliot wave TA, and we bounce up after a final bottom as low as 23k. Thanks for reading :P