Profitunity Analysis of Bitcoin Futures and The Elliott Wave Count

Bitcoin is quite a hot topic, even if you are not a trader!  The purpose of this video blog is to show how PROFITUNITY Trading Group’s indicators work and how we count the Elliott Wave on this Bitcoin Daily Chart.

We start looking back at Bitcoin chart at the Wiseman Bullish divergent buy signal in March of 2020 just above the $6200 area. There were 3 more buy signals @ $10000 range in September of 2020.  There were also several Fractal buys along the way if you missed the Bullish Wiseman signals.

Once the market started moving up rapidly in October of 2020 it never retraced below the entry signals.

January of 2021 we had the first peak on the Awesome Oscillator (AO) which is our 5/34 moving average plotted in a histogram.  This is labeled on the chart at Wave 1/3. A small a,b,c, correction follows and then the market continues back up.  We soon have a taller peak on the AO which becomes Wave 3/3 on this chart in February of 2021 and is marked. 

Why is this important information?  If we know that was just Wave 3 of Wave 3, and we know a correction will immediately follow which it does as marked a,b,c, but more importantly we have higher prices to come to complete this 5 wave impulse pattern.

Small corrective wave finishes and another 5-wave impulse wave up will take out the high of the price at Wave 3/3 for the completion of Wave 5 of Wave 3.  This is a complete 5 wave pattern on this Daily time frame. 

Then the large degree Wave 4 starts which is marked on the chart as A,B,C. Note we have 3 of C marked but not 5 of C yet- as it may be the end of the C wave. 

We put a Fibonnaci retracement on the Wave 3 up to get our target area for this Wave 4. Bitcoin futures retraced to the .618 area.  If correction is over we will not go lower than the price on June 8th. That was also a Bullish Divergent Squat bar signal with the PROFITUNITY system on the 4 hour chart!

Looking at the 240 minute chart to see the interior sub waves of the Wave 4 correction- this will help us count the last C Wave to see if it meets the requirements to be over. If it is this is the best trade location for the new impulse wave up.

Normally I would say we have another low to complete the wave C down however on 5/19 we had a rather large range bar that took out all previous lows.  This may be an “outlier” – it was due to the announcement of Elon Musk that Tesla will no longer accept Bitcoin for payments. Earlier in the year Tesla purchased 1.5M in Bitcoin and announced that Tesla would accept Bitcoin as payment.  So with all this new driven information it is a volatile market, and I would be cautious as a new trader.  Markets usually fall much faster than they rise!

It is not clear if the C wave is over due to not having another low below that large bar.  If we see this market retrace into the $50000 range, then I would feel more confident that this is the Wave 5 up and corrective wave is over.  If this is the next impulse wave we will see highs above the $65K range for Wave 5.

I want to be clear about this we are not trying to teach you how to be an Elliottician, just how to help understand the direction of the market and the behavior to expect in the waves. In Elliott Wave we have cycles of 8 waves5 impulse waves followed by 3 wave corrections. Knowing these patterns can be a great addition to a traders toolbox.

Counting the Waves is not an exact science, but more of an ART form, and pattern recognition is key in wave counting. I have been counting for almost 30 years and have found an easier way to identify the waves than some of the traditional Elliott Wave theorists

Just think, what if at least half the time you are in the market and you know what direction to expect, and how to approach the different types of waves; that could improve your trading and help you be able to understand the underlying structure of the market.  No matter what system you follow, the EW can be applied to all markets and time frames.  If you want to learn how we count Elliott Waves with a simple approach check out our website and courses.

Thanks to my father Bill Williams for making a path for all traders in the markets..

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