By Elliott Wave International
At 1:53 AM on January 10, Tesla founder and a frequent social media pot-stirrer, Elon Musk, tweeted, “Bitcoin is ‘NOT’ my safe word,” only to add a wink face emoji five minutes later. What did it all mean?
Best guess, it was Musk’s tongue-in-cheek nod to the fact that in the two weeks after the January 2nd U.S. air strike which killed Iran’s military leader Qasem Soleimani, bitcoin’s value soared 20% like a good ole fashioned safe-haven asset would.
And thus, the idea of bitcoin as “digital gold” (Jan. 15 Forbes) was born. Wrote one January 9 crypto site:
“The conflict between the US and Iran served as an example of how bitcoin has evolved as a safe haven asset in times of global turmoil.” (Jan. 9 CryptoBriefing)
The categorization of bitcoin as a haven of safety is a radical revision of recent history. Case in point, at the end of December 2019 — just days before the Soleimani assassination set off the geopolitical sirens — mainstream analysts nailed a figurative “DANGER: KEEP OUT” sign to bitcoin’s doors.
At the time, bitcoin was circling the drain of a one-year low with prices slashed in half from their June 2019 high. And, as these news items from late December show, the crypto king was supposedly about as safe as a stick of dynamite in a fireworks factory.
- “BTC/USD continues to be firmly locked within the market bears control… The price runs the risk of a potential fast move down towards $5000.” (Dec. 16 FX Street)
- “Why Bitcoin’s bear market will drive price to $3000.” (Dec. 12 Yahoo! Finance)
- “Bitcoin Faces Dangerous Year as Global Market Feel Pinch… As economies around the world begin to stagnate after the growth of the past decade, many believe Bitcoin will face a harrowing future. (Dec. 29 Be In Crypto)
And then came the sudden shift to bitcoin as a “safe haven.”
Essentially, there are two options to explain what’s going on. First: Bitcoin “evolved” from a danger into a safe haven, overnight. Not likely. Or, the more realistic choice: Mainstream analysts changed their tune only AFTER it had soared 20%, and it was that rally that changed their hearts.
All the while, in our opinion the real reason for bitcoin’s upside breakout in early January had nothing to do with the escalation in U.S. and Iran tensions; but rather a bullish Elliott wave pattern.
Here, our hot-off-the-press, free Club EWI resource titled “Crypto Trading Guide: 5 Simple Strategies for Catching the Next Big Opportunity” sets the record straight:
“Market prices unfold in repeating patterns that you can measure with a ruler, a calculator, or basic software. This gives you objective ‘sign posts’ to your desired destination — namely, low-risk market opportunities.”
You be the judge. On December 31 — long before the Soleimani “shock” — our Currency Pro Service analysis of bitcoin identified one of the most powerful Elliott wave patterns underway on the BTC-USD price chart, a “third wave.” Our chart, pictured below, shows the bullish implications for a stout move higher:
Then, on January 3, Currency Pro Service confirmed the bitcoin “bulls [now] have an opportunity to take this market higher,” a which played out nicely with bitcoin’s strongest start to a year since 2012.
Here again, our free “Crypto Trading Guide: 5 Simple Strategies for Catching the Next Big Opportunity” seizes the page to show traders how to “identify likely turning points — and act! — by using Elliott wave analysis.” The Guide writes:
“Once you’ve properly ID’d a pattern on a market’s price chart, you can then anticipate the direction prices will likely move next.”
That’s exactly what our Cryptocurrency Pro Service analysis did in anticipation of bitcoin’s January comeback.
When it comes to identifying high-confidence setups in the ever-volatile crypto markets, we have one “safe word” for you: our “Crypto Trading Guide: 5 Simple Strategies for Catching the Next Big Opportunity.” (Technically, that’s 12 words, but you get the point!)
The best part is, every Club EWI member has instant access to the entire Crypto Trading Guide — FREE. Join our free Club EWI now and dive right in.