The 4-hour wave structure of BTC/USD appears clear and well-defined. Following a prolonged and complex corrective a-b-c-d-e wave, which formed between March 14 and August 5, Bitcoin initiated a new impulsive wave, which has already developed into a five-wave formation. Given the size of the first wave, the fifth wave is likely to be shortened, leading to the expectation that Bitcoin may not exceed $110,000–$115,000 in the coming months.
The three-wave formation of Wave 4 further validates the accuracy of the current wave structure. Bitcoin's previous growth was supported by institutional investments, government backing, and pension funds. However, Donald Trump's policies could drive investors away, as an uptrend cannot continue indefinitely. The current shape of Wave 2 within Wave 5 raises doubts about its validity, leading to the possibility that the bullish phase is already over.
Bitcoin Stuck in a Limited Price Range
Bitcoin has remained range-bound this week, with minor price fluctuations that fail to meet traders' expectations. The BTC/USD pair continues to slowly decline toward the Wave 4 low, reinforcing the idea that the bullish phase is complete.
Trump's presidency has not triggered a Bitcoin surge or led to the creation of a BTC reserve in the U.S. Consequently, there are no strong catalysts to drive demand for Bitcoin at the moment, especially after its significant price rally last year. The lack of strong news flow has further reduced market activity, and Trump's policies have predominantly contributed to Bitcoin's price decline.
General Outlook
Based on the BTC/USD analysis, Bitcoin's uptrend is either approaching its end or has already concluded. This may not be a popular view, but Wave 5 appears shortened. If this assumption is correct, Bitcoin may face either a sharp decline or an extended correction. Currently, a complex correction seems more likely.
At this stage, buying Bitcoin is not advisable. If BTC falls below the Wave 4 low, it would confirm the transition into a bearish trend phase.
On higher timeframes, the five-wave upward structure is visible, suggesting that a corrective or bearish trend phase may begin soon.
Key Principles of This Analysis
- Wave structures should be simple and clear. Complex formations are difficult to interpret and often shift unexpectedly.
- If there is uncertainty in the market, it's better to stay out.
- No market direction is ever 100% certain. Always use stop-loss orders to manage risk.
- Wave analysis can be combined with other analytical methods and trading strategies for better accuracy.
