Bitcoin (BTC) could gain another 50% before mass sell-off to complete its bear market, new research predicts.
In the latest edition of its regular market newsletter, The Crypto Circular, trading firm QCP Capital issued a dire warning to those who believe the crypto winter is over.
Research warns of “final sell-off of the 5th wave”
Bitcoin has surprised by holding new support levels abruptly recaptured in its week-long bull run, standing at $21,650 so far.
Despite widespread distrust of the “choreographed” move, BTC/USD has recaptured key trendlines and psychological price points.
There is still plenty of fuel for QCP to send the pair higher, but that still doesn’t mean the overall bear market is over and dusted.
Updating its long-term Elliott Wave price analysis, it argued that the current move higher represents a Wave 4 for Bitcoin — essentially a bear market relieving move.
“Make no mistake, what we are seeing in risk markets now is characteristic of wave 4,” she wrote.
“We maintain our view that this bounce since the November 2022 lows is just a wave 4 correction and we have a definitive wave 5 sell-off ahead of us.”
Such a final surrender would be no joke. Wave 5, a previous chart from December 2022, showed that both Bitcoin and Ether (ETH) could potentially fall below their 2022 bottoms.
Annotated ETH/USD chart (screenshot). Source: QCP Capital
“The extension we are currently seeing in 2023 falls within the parameters of wave 4, although it has broken some short-term technical levels to the upside, thereby increasing bullish momentum,” the newsletter continued.
Elliott Wave theory states that the 20%, 38.2% and 50% Fibonacci retracement levels in wave 4 are of particular importance. With Bitcoin already correcting nearly 20% from recent macro lows, there are now two remaining price targets in play: $27,100 and $31,850.
“Technically, wave 4 is still in play until these levels are broken and a final wave 5 for these markets breaking the lows should not be ruled out,” QCP said.
“Without a doubt, the pain trade is lower at the moment.”
The WEF accompanies the shaky BTC price action
As Cointelegraph reported, over the past few days, Bitcoin has traded its “only up” trading behavior for some much-needed consolidation.
Related: Bitcoin Sees New 4-Month High as US PPI, Retail Data Releases ‘Big Miss’
This was helped by panic centered on the United States’ shutdown of crypto exchange Bitzlato, which emerged amid fresh regulatory concerns about Bitcoin from attendees at the World Economic Forum now taking place in Davos, Switzerland.
BTC/USD is trading around $20,800 at the time of writing on Jan. 19, data from Cointelegraph Markets Pro and TradingView showed.
BTC/USD 1 Hour Candlestick Chart (Bitstamp). Source: TradingView
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