Bitcoin market review and analysis on October 21
Market Review
Actually, I wanted to talk about the market trend of Bitcoin yesterday, but I was delayed by some things. Today, I'll just briefly mention a few points. Today is October 22nd, let's start by reviewing the market from the day before yesterday.
On the evening of October 20th, I discussed the five-wave upward trend of Bitcoin (#Bitcoin), from 59k to the high of 69.5k. It's clear that this wave's five-wave rise has basically completed. Specifically, Wave 1, Wave 2, Wave 3, and Wave 4 all met expectations. Wave 2's retracement against Wave 1 was relatively shallow, about 35%, while Wave 4's retracement against Wave 3 was more standard, reaching 50%. This 50% retracement is very typical of Elliott Wave Theory.
Five-Wave Wedge Structure
Next is the Wave 5 wedge structure that everyone is more concerned about. This trend lasted about 6 days, from October 15th to October 21st. Wedges are generally easy to identify because their formation usually takes a long time, and this wedge was no exception, taking 6 days to form. During this period, you could clearly see the price compressing, but once the wedge breaks, the market will experience a rapid decline.
For example, from yesterday to today, Bitcoin's price has already dropped by more than $2000. This drop is much faster than during the wedge formation phase. After the wedge breaks, prices usually drop rapidly. It's not an instant drop, but this is the logic of a 'sharp decline.'
Key Retracement Points: The Significance of 66.4k and 61.9k
The most critical retracement point this time is 66.4k. Only when the price falls below 66.4k can we consider this retracement a normal correction against the rise from 59k to 69.5k. If the retracement goes too deep, such as falling below 61.9k, then our earlier hypothesis of a large upward impulse wave starting from 52.5k might be invalidated.
However, based on the current situation, it's unlikely that 61.9k will be broken. The retracement will probably stop around 65k, give or take $1000. Of course, this is just a rough judgment—we need to watch the market as it develops.
Don’t Short in a Bull Market
Here, I want to remind everyone again: don’t blindly short in a bull market! Many people try to make a quick profit by shorting in a bull market, but it’s very dangerous. Shorting is much more complicated than it seems, especially with assets like Bitcoin, where short positions can easily get squeezed. If you're worried about a decline, you can choose to sell part of your position and gradually buy back after the drop—you don’t have to catch the absolute bottom. Most people can’t time the bottom perfectly, and trying to catch the absolute low is unrealistic for the average trader.
Summary: Randomness and Prediction
Overall, yesterday’s retracement isn’t completely over yet. After the retracement completes, we hope to see the third wave of upward movement. But remember, the market is random—we can’t stubbornly assume it will definitely rise or fall. The market needs to be watched as it develops, and we must dynamically adjust our predictions based on the latest signals.
That’s today’s Bitcoin market analysis. Everyone, please wait patiently for the next moves!
$Strategy(MSTR.US) $Coinbase(COIN.US)
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