Indeed, based on the Bitcoin Fear and Greed Index, which has been at Fear to Extreme Fear levels for nearly a month, one would assume that Bitcoin (BTCUSD) is dead. More on that later, as for now, Bitcoin is down "only" ~30% from its all-time high at last week’s low. Furthermore, in the previous update, we observed that BTC is currently trading at the same level as then. See Figure 1 below.
Based on weekly and monthly charts, where we count down weeks and months as corrective waves, the 2nd wave, and the 4th wave, allowing us to account for >99% of all price movements, we find that Bitcoin still needs at least one larger wave (W-v red) higher. The fourth wave tends to retrace 38.2% of the previous third wave, which in this case targets $77350.
The correction in August 2024 reached the lower end of the zone at the time of closing. See the blue horizontal arrow in Figure 1A. Additionally, July 2021 and September 2017 experienced declines of 56% and 43%, respectively, placing the current decline of ~30% in perspective. See Figure 1B.
The weekly RSI5 reached ~22 in early March, and the low figures during the current Bull market coincide with significant lows; see Figure 1A. Finally, the weekly MACD increased in December 2024 compared to March 2024, confirming higher prices (dashed green arrows).
Thus, the EWP number of price charts and technical indicators suggest that the Bull is not dead. Since it is good to find out, or rather get a third-party opinion, it is wise to see if the views of other experts align with one’s own assessment.
Figure 2A shows that the next ideal upward target is $166.7 thousand, based on Fibonacci extension. Figure 2B shows that the Global M2 Money Supply is highly correlated with the price of Bitcoin (since early 2024). This indicates a rally in this spring and summer, which arguably has already begun from now.
Figure 2C shows that if Bitcoin closes this month above $79,583, then the rally will continue, while Figure 2D shows that the very low Bitcoin Fear & Greed index during rallies often coincides with significant lows. The shaded area is a bearish market based on four phases of Bitcoin (Figure 1B) and is excluded.
Combining a large number of data points with our EWP count, the weight of evidence suggests that the new Bearish market has not yet started, but the current decline is a correction that will soon end, in a more significant upward trend. We estimate the current Bull will target $148500-185640, with an ideal target of ~$166K by the end of this year.
