Elliot wave theory is surprisingly simple. It was created by a man named Ralph Nelson Elliott, who revealed that stock markets operated in repetitive cycles, rather than unpredictably.
What characterizes cyclical market movements
When it is said that the development of the Bitcoin market phases are usually cyclical, it is closely related to the emotions and feelings that are generated around the market. It may seem strange, but the psychology of investors and their state of anxiety and hope have the power to change the market trend. If you want more information, you can consult bitlq.org.
Investors usually respond to the events that occur, that is, the news could be the main responsible for the changes in the crypto market.
According to Elliott’s theory, the thinking and psychology of investors always tend to generate repetitive patterns either to take prices to the top or to a significant drop, where the movements that are generated in relation to the price of digital assets are known as Waves.
This tool is considered just one of the many that exist to be able to analyze the market of digital currencies or cryptocurrencies in an easier, faster and more efficient way.
This statistical tool is not about calculations, but analyzes the historical trends of the financial markets, working under the premise that history repeats itself.
All trend movement is created by Elliot structures, it is said that the complete wave has 8 impulses divided into 5 impulsive waves in the direction of the trend and 3 corrective ones.
This tool is considered one of the most used in the financial market since its ease of interpretation allows users to adopt it to visualize market price variations.
The most convenient thing when making digital financial investments is to combine what is technical analysis and fundamental analysis, thus achieving an overview of the market.
The tool that best predicts the price of BTC
This wave model has been successfully applied to the prediction of the bitcoin price on several occasions, and specifically during the bullish cycle of 2017-2018 where the expected price levels were obtained according to the analysis of this model.
As we all know, if the spike is missed, the bitcoin price goes down a lot pretty quickly. During the downtrend, almost everyone pulled out. People thought Bitcoin was gone. Somehow many people hung up their gloves in the face of this economic phenomenon.
Such is the case of the bearish phase of 2021 where investors did not generate adequate weight in the market and suddenly the price of Bitcoin rose to reach $61,000.
This phase could be compared with the current one, which translates into a corrective stage despite going through such a controversial crypto winter.
The bitcoin “red spring” began in mid-May when Tesla CEO Elon Musk, to date a staunch supporter of the cryptocurrency, denied it due to the environmental impact of its mining and stopped accepting it as a form of payment for his electric cars, sharpening Elliott’s corrective wave.
It is for this reason that any opinion that is given by Elon Musk directly and proportionally influences the price of Bitcoin, where even a simple emoji with a broken heart represented one of the most abrupt falls.
The technical situation of bitcoin is complicated. The cryptocurrency has plunged as much as 13% from ethereum, Cardano is also plunging further, testing key support at $30,000. If this downward support is broken, bitcoin could expect a ‘vacuum’ drop to the $23,000-20,000 area, according to Javier Molina, spokesman and analyst for financial firm eToro.
The Fluctuation of BTC in charge of social networks
It is incredible how actions as simple as a message through social media platforms can affect the value and movement of a cryptoactive like bitcoin, destabilizing all investors who faithfully believe in its bullish theory.
However, the question that the followers of the token ask themselves is how long these types of meaningless and vain strategies will continue to affect the value of the cryptocurrency, dragging down its value due to the simple influence of an ex.
Conclution
It is important to consider that any person, whether an expert or a novice, must establish a routine of evaluation and market analysis prior to investing in cryptocurrencies, nothing ensures the success of operations more than the preparation of the investor in relation to what happens in the environment.
