Home / Bitcoin / Are we riding the fifth wave of Bitcoin?

Are we riding the fifth wave of Bitcoin?


Have you ever heard of Elliott's waves? No? Well, we're not surprised. Even among the technical market analysis specialists, they are rather arcane. So let me tell you what they are and why they are important and what they have to do with the current situation of Bitcoin. Continue reading, we will not receive technical information, just simple English.

Elliott waves are a form of technical analysis used to predict the stock market (and, in the last decade, even the cryptographic market). The use of this technique requires that you analyze a chart so that you can identify a type of event called "wave", which is a kind of fluctuation in the market, and should reflect the psychology of the moment. According to this theory, all markets have a tendency in five waves. Once the fifth wave hits the market, a new trend will begin. It can oppose the previous model or amplify it, but it will be different.

Was it too abstract? Yes, we know. We explain in more practical terms: Bitcoin will rise again when Elliott's fifth wave reaches him. It's so simple, according to this tool.

It seems a little magical or too empirical, but many technical traders use this approach all over the world to make money. The relevant question now would be, of course, the current Bitcoin sway the fifth? The answer is no, and we'll explain why.

The fifth wave of Bitcoin has not yet arrived

Several analysts and YouTubers have published their opinions on the current situation and, for many of them, this is Elliott's latest wave. But we have reasons for not agreeing with them.

One of the "principles" that you have to master with this technique is that everything should always be interpreted (or constructed) in the simplest way possible. This is a problem for those who predict the final wave is here because they are building their waves in a somewhat complex form that needs many justifications when it should be evident.

So, there is the problem of cognitive bias (the jokes that our mind plays on us sometimes that damage objectivity). We are all fed up of the bear market. It has been falling for 11 months and, if that was not bad enough, it became a carnage last week, and then again over the weekend. We all want things to get better as soon as possible. And this is also the problem.

Elliott Wave's theory also states that you should never interpret any scenario in a way that aligns with your desires. Given the different possible interpretations, you should always choose the one that best fits your goals, unless the evidence is not so strong that no other explanation is possible. This avoids a cognitive trap known as "confirmation bias", which means that we believe in what we want to believe, instead of what we are seeing.

In other words, when you work with Elliott Waves, you must always be sure that your desire is not to get the best out of you. Since it is reasonable to assume that analysts who believe in the fifth wave of Bitcoin want to arrive, they are breaking this simple rule.

To conclude all we can say is that the fifth wave will come sooner or later. We can not tell you when (Elliott's wave theory does not include any kind of reliable timing prediction), but it always comes.

So Bitcoin will rise again, and chances are it will reach levels that we could not imagine right now. But that's not what's happening right now. In case you are curious, the best analysts agree that we are currently leading the third wave of Bitcoin, so we still have two to go.

For real-time business alerts and a daily distribution of encrypted markets, subscribe to Elite membership!

Disclaimer: this article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and its affiliated companies, employees, writers and subcontractors are cryptocurrency investors and may from time to time have holdings in some of the coins or tokens they cover. Please conduct your own in-depth research before investing in any cryptocurrency and read our full disclaimer.

Image courtesy of Pixabay.

Source link