empty
29.01.2025 11:25 AM
Wave analysis of BTC/USD on January 29. Bitcoin neglects all headwinds

This image is no longer relevant

The BTC/USD wave structure looks clear on the 4-hour chart. Following a prolonged and complex corrective a-b-c-d-e structure formed between March 14 and August 5, a new impulse wave has emerged. It is already taking shape as a five-wave formation. Based on the size of wave 1, wave 5 is likely to be dwarf. Given this structure, I do not expect Bitcoin to rise above $110,000–$115,000 in the coming months.

Wave 4 has formed a three-wave pattern, confirming the correctness of the current wave analysis. Since the formation of wave 5 has begun, it is time to look for buying opportunities. However, as mentioned earlier, this wave could end very soon—or may have already completed.

Bitcoin's growth has been fueled by a steady influx of institutional investments, including from hedge funds, government entities, and pension funds. However, Trump's policies could force investors to exit the market, and no trend can remain bullish indefinitely.

The market ignores sell signals

On Tuesday, BTC/USD dropped another $1,000, yet market participants continue buying aggressively, pushing the world's leading cryptocurrency back toward its recent peaks. In my view, this behavior is puzzling, as everything seems aligned for a corrective trend phase to begin.

Of course, large market players have their own logic—firms like MicroStrategy refuse to consider anything except buying. Perhaps Bitcoin does have a bullish future, and one day its price might reach $1,000,000. In that case, the strategy is simple—buy at any price and hold.

However, when trading Bitcoin, it is unusual to see trends without corrections, with the market completely ignoring negative factors. Many traders had been anticipating an "altcoin season", yet it never arrived. Altcoins (except for the largest ones) have lost interest among investors. Even Ethereum is declining, while Bitcoin remains stable.

Donald Trump promised to create a national Bitcoin reserve immediately after his re-election. However, he quickly forgot about that promise as has happened with many other pledges. In my opinion, the US government will not buy Bitcoin for reserves at current prices—why would they, if they can wait for a better entry point? However, for that to happen, Bitcoin needs to drop significantly.

Right now, I see another speculative bubble forming in the cryptocurrency market. Every bubble bursts sooner or later. Even though Bitcoin is carrying on rising, it will eventually face a major collapse. In this situation, I cannot recommend buying BTC, no matter how attractive it may seem.

Conclusions

Based on my BTC/USD analysis, I believe Bitcoin's growth phase is nearing its end. This may be an unpopular opinion, but wave 5 could end up shortened, leading to either a sharp collapse or a prolonged correction. Therefore, I do not recommend buying BTC at this stage.

If wave 5 starts forming an extended five-wave structure, then a convincing wave 2 correction should appear within it. At the moment, wave 2 is visible, but it is not strong enough to confirm further growth. At least one more decline is likely ahead.

On a higher time frame, Bitcoin is forming a five-wave bullish structure. However, this suggests that a corrective or bearish trend may soon begin.

This image is no longer relevant

Key principles of my analysis

1. Wave structures should be simple and clear – complex structures are harder to trade as they frequently shift unexpectedly.

2. If there is no clear market direction, it's better to stay out.

3. There is never 100% certainty in price movements. Always use Stop Loss orders.

4. Wave analysis can be combined with other types of technical analysis and trading strategies.

Chin Zhao,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

Crypto market overwhelmed by panic selling due to Trump' tariffs and hack at Bybit

BTC/USD: hectic sell-off hits crypto market following Trump's tariffs on Canada and Mexico The crypto market suffered a major collapse after US President Donald Trump introduced new tariffs against Canada

Jurij Tolin 13:16 2025-02-26 UTC+2

Wave analysis of BTC/USD on February 26. Bitcoin falls asleep at $96,000 and wakes up at $88,000

The wave analysis of the 4-hour BTC/USD chart is quite clear. After a long and complex a-b-c-d-e correction, which unfolded between March 14 and August 5, a new impulse wave

Chin Zhao 12:47 2025-02-26 UTC+2

Trading Recommendations for the Cryptocurrency Market on February 26

Bitcoin has reached the $86,000 level, but this may not be the end of its movement. There was strong buying activity in Ethereum, which saw a rebound from

Miroslaw Bawulski 10:27 2025-02-26 UTC+2

Ethereum (ETH) Trading Recommendations for February 26th

Bitcoin has initiated a significant decline, which may only be the beginning of a larger bearish trend. As we have previously noted, the entire cryptocurrency market follows Bitcoin to some

Paolo Greco 05:53 2025-02-26 UTC+2

Bitcoin Trading Recommendations for February 26th

What we have been anticipating for weeks has now materialized. While many factors could have triggered Bitcoin's latest crash, analyzing them in detail won't make the situation any easier

Paolo Greco 05:49 2025-02-26 UTC+2

Bitcoin Losing Ground: Can the Market Be Saved by a Buy the Dip Strategy?

As the price falls, interest grows—this best describes the latest developments in the Bitcoin market. Despite the asset dropping to a three-month low, major players, including hedge funds and governments

Ekaterina Kiseleva 00:10 2025-02-26 UTC+2

Bitcoin and Ethereum: key factors behind their recent plunge

Bitcoin plunged by 6.5% and Ethereum lost over 7.0% in just the first half of today alone. As for Bitcoin, there had long been speculation about a break

Jakub Novak 14:09 2025-02-25 UTC+2

Cryptocurrency Market Trading Recommendations for February 25th (U.S. Session)

Bitcoin and Ethereum have experienced significant declines, with Bitcoin hitting a new yearly low and Ethereum testing the $2,300 mark after trading around $2,800 just days ago. The world's largest

Miroslaw Bawulski 13:56 2025-02-25 UTC+2

Upcoming Ethereum Network Upgrade Already in Testing

The cryptocurrency market has experienced a significant decline, closely following the U.S. stock market, which has lost considerable ground in recent trading days. Bitcoin dropped

Jakub Novak 09:17 2025-02-25 UTC+2

Trading Recommendations for the Cryptocurrency Market on February 25

Bitcoin has fallen from the $91,000 mark, raising concerns about its potential for further growth. Meanwhile, Ethereum has dropped over 7% in just one day, returning to a downtrend after

Miroslaw Bawulski 07:27 2025-02-25 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.