Crypto Rally: Bull Market or Bear Trap?

By Elliott Wave International

Bitcoin rallied 48% from July 1 to its intraday peak on September 21, and Ethereum has come roaring back too. Crypto investors have noticed.

This is the Crypto Fear & Greed Index, a widely followed gauge of crypto market mood. For most of the past year it sat in “fear” territory, sinking into single digits in February. Since mid-August it has surged, reaching 74 (“greed”) near Bitcoin’s recent highs.

Here’s what makes that remarkable: according to Elliott Wave International, investors were showing more optimism than they did at Bitcoin’s all-time high last October.

So what does a mood swing like this mean? Is the rally the start of a new advance, or a bull trap?

That’s the question EWI’s Senior Cryptocurrency Analyst, Tony Carrion, takes on in The Crypto Rally: Breakout or Bull Trap? The report is based on his analysis in the October Global Market Perspective. Inside, you’ll find:

• The Elliott wave structures now unfolding in Bitcoin and Ethereum
• What investor sentiment may be signaling next
• Why Solana, XRP and Chainlink are sending distinctly different signals than the two crypto giants
• EWI’s big-picture outlook for all five

As the report puts it, simply being “bullish crypto” or “bearish crypto” isn’t enough right now.

Read The Crypto Rally: Breakout or Bull Trap? for just $7

Adjusting an Elliott Wave Count in Real Time

By Elliott Wave International

On August 25, Elliott Wave International's Commodity Pro Service editor, Jim Martens, saw something in the coffee chart that bothered him.

He showed this chart and told subscribers:

“The bullish outlook stands, but if a larger wave II correction is unfolding, coffee will turn lower from nearby levels. The overlapping rise from 293.25 to a double top near 341.80 could represent wave ((B)) of a flat correction.”

Coffee gapped lower two days later.

On August 27, Jim updated his forecast:

“As warned on Tuesday, the double top represents wave ((B)) of a larger wave II correction: a flat. Wave (C) should exceed the end of wave (A) at 293.25, and wave II will retrace 61.8% of wave I at 273.90.”

What Happened Next

Less than a month later, December coffee reached the 273.90 objective Jim had identified.

From Jim’s August 27 outlook to the target, coffee declined approximately 12.6%.

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This article was syndicated by Elliott Wave International and was originally published under the headline Martens' Coffee Forecast - Switch from Caffeinated to Decaf Pays Off!. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.