In this episode of NewsBTC’s daily technical analysis videos, we examine how Bitcoin might have bottomed precisely at the 1.618 Fibonacci extension, using Elliott Wave Theory.
Have a look below at the video.
VIDEO: Bitcoin Price Analysis (BTCUSD): September 29, 2022
Was Bitcoin At The Golden Ratio The Bottom?
Elliott Wave Theory explains that corrections are made in ABC patterns. The Fibonacci Extension Target for where a correction to C might be made can be found by using the Fibonacci Retracement Tool. It will draw the line from the bottom of the A waves to the top. It was precise to the exact 1.618 Fibonacci level, with a wick of $17K.
1.316 is the gold ratio. Also known as the Divine proportion,
Source: BTCUSD on TradingView.com| Source: BTCUSD on TradingView.com
The Past Bear Market Bottoms Are Pinpointed with Golden Accuracy
This discovery shocked us so we applied the same strategy when examining the 2018 bear market. Wow, it was the same target that ended at the golden ratio once again. This is illustrated by drawing in the B-wave descending triangle and taking the Fibonacci extension starting at the bottom of A wave, to the top. This projecting the bear market bottom was perfect, as you can see.
This could have also happened during the bear market of 2015, if we zoom out. The ABC correction adds another layer of confirmation. This pattern holds, but not nearly as well at the rest. It is still accurate enough to show that the golden ratio may be an important factor in Bitcoin’s eventual bottom.
Fibonacci Project: The Next Big Peak in Cryptocoin?
We now know that projecting extensions from the A wave gives us the C wave bottom… hopefully. How does it work when you project a target for the upside? Based on the 2017 bear market peak and the bottom of that bear market, we project the top bull market for 2021.
The golden ratio, which could see Bitcoin reach a value of $161,000 each coin, if the bull market continues as it has in the past, would be the exact same for the next one.