Bitcoin: Here's the "$64,000 Question"

Will the cryptocurrency ever trade at its all-time again?

By Elliott Wave International

In the 1950s television game show, "The $64,000 Question," contestants answered general knowledge questions and the money they could earn doubled as questions became more difficult.

The show's title spawned the well-known phrase -- "that's the $64,000 question" -- which, as you probably know, means the crucial question which gets to the heart of a matter.

Well, "the $64,000 question" for bitcoin is: Will the cryptocurrency ever trade at its all-time of $64,899 again (which was reached on April 14 of this year)?

This is a top-of-mind question for many bitcoin investors who've seen the cryptocurrency bounce back from every "correction" since the start of its meteoric rise.

For instance, on Jan. 27, the headline of a major financial magazine asked (Forbes):

Bitcoin Has Crashed. Is This The End?

That was in response to Bitcoin's swift slide from near $42,000 to around $30,000.

Yet, bitcoin's Elliott wave pattern suggested that the price would rebound. Here's a chart and commentary from the Feb. 5 Global Market Perspective, an Elliott Wave International monthly publication which covers 50+ worldwide markets:

Our preferred [Elliott wave] count is that [Bitcoin] is advancing within the subwaves of a [larger up wave]. ... The wave IV (circle green) correction played out for most of January. Wave evidence suggests that the correction ended on Jan. 22.

As you probably know, the cryptocurrency went on to climb to as high as near $58,000 on Feb. 22. But, then, another heart-pounding drop followed. The price had dropped around $12,000 in just a matter of days.

But, yet again, the digital currency bounced back and eventually hit that April 14 high of more than $64,000.

So, we return to the "$64,000 question": Will bitcoin ever trade at $64,000 again?

The Elliott wave model is once again offering insight -- you'll find it inside Elliott Wave International's Crypto Pro Service right now, as soon as you've subscribed.

Also, tap into the knowledge found inside the special free report:

Crypto Trading Guide:
5 Simple Strategies to Catch the Next Opportunity

Here's a quote from that timely free report:

From its December 2017 peak near $20,000, Bitcoin plummeted more than 80% to below $4000 per coin at its 2018 low.

Yet, as you just saw, in both cases -- before Bitcoin took off and before it crashed -- Elliott wave analysis and sentiment readings were several steps ahead of the markets.

Imagine what you could have done with such advance information.

Elliott wave analysis is uniquely equipped to warn you of changes no one else sees coming.

You can have Crypto Trading Guide: 5 Simple Strategies to Catch the Next Opportunity on your computer screen in just moments. Remember this special report is free.

Just follow this link: Crypto Trading Guide: 5 Simple Strategies to Catch the Next Opportunity

This article was syndicated by Elliott Wave International and was originally published under the headline Bitcoin: Here's the "$64,000 Question". 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.

Bitcoin: More Volatility Directly Ahead?

Here's how Elliott wave analysis helps you prepare for cryptocurrency volatility

By Elliott Wave International

If there's a single word to describe bitcoin's price action, that word is "volatile."

Yet, those who invested roughly a year ago in the cryptocurrency -- and stuck with it -- have been hugely rewarded. (At least until very recently, as bitcoin traded more than 50% lower from its all-time high on May 19, as the price careened nearly 30% at one point on that day alone.)

Indeed, Elliott Wave International cryptocurrency analyst Tony Carrion provided a video update on bitcoin in the March 2020 Global Market Perspective, a monthly publication from Elliott Wave International which provides coverage of 50+ worldwide financial markets.

You'll notice in the chart below that his analysis included a forecast for higher prices (as indicated by the upward blue arrow in the right side of the chart):

At the time, bitcoin was trading a tad north of $8700. Of course, since then, bitcoin has climbed as high as near $64,000 before pulling back significantly.

Remember, at the time the March 2020 Global Market Perspective published its bullish outlook, there was a lot of negative news about this "granddaddy" of crypto-assets.

For example, here's a Feb. 27, 2020 headline from a major financial publication (Forbes):

Bitcoin Has Crashed -- Now What?

So, the upward rise in bitcoin from March 2020 was by no means a "given."

Realize that EWI's analysts do not extrapolate the present into the future as so many investors are inclined to do. No -- they focus on a market's Elliott wave pattern, and bitcoin's price pattern at the time strongly suggested that the cryptocurrency was not only headed higher -- but significantly so.

The questions now are: Does bitcoin have a lot further to climb -- according to the Elliott wave model -- or is an even higher degree of volatility expected just around the corner?

Well, a May 13 headline suggests that "fundamentals" are driving bitcoin's price (CNBC, May 12):

As much as $365 billion wiped off cryptocurrency market after Tesla stops car purchases with bitcoin

Yet, it may be a good idea to see what Elliott wave analysis suggests is next for bitcoin, in addition to other cryptocurrencies.

If you're new to Elliott wave analysis, or need to brush up on your knowledge, you are encouraged to read Frost & Prechter's book, Elliott Wave Principle: Key to Market Behavior. Here's a quote:

No matter what your convictions, it pays never to take your eyes off what is happening in the wave structure in real time. Ultimately, the market is the message, and a change in behavior can dictate a change in outlook. All one really needs to know at the time is whether to be long, short or out, a decision that can sometimes be made with a swift glance at a chart and other times only after painstaking work.

Good news: You can access the online version of this Wall Street classic for free when you join Club EWI, the world's largest Elliott wave educational community (about 350,000 members and growing rapidly). A Club EWI membership is also free.

Just follow this link to get started: Elliott Wave Principle: Key to Market Behavior -- free and instant access.

This article was syndicated by Elliott Wave International and was originally published under the headline Bitcoin: More Volatility Directly Ahead?. 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.

True or False: Inflation = Stock Market Sell-off?

Before you answer, recognize that the "market has a law of its own"

By Elliott Wave International

The topic of inflation has been grabbing a lot of financial headlines.

Indeed, financial journalists have "blamed" inflation for recent stock market sell-offs.

On May 11, when the Dow Industrials closed 475 points lower, an intraday headline said (Reuters):

Wall Street drops on inflation jitters, led by tech stocks

The next day, on March 12, the sell-off persisted. Another financial news source noted (CNBC):

Dow tumbles 680 points in worst decline since January as hot inflation reading spooks investors

So, at least two news organizations agree that inflation was the culprit behind the sell-offs.

However, investors who follow the news closely may have done a little head scratching. Meaning -- at the start of the same week (May 10) -- the Dow climbed to a record high. So, were inflation worries absent on that day? Not according to this May 10 headline (CNBC):

Americans fear highest inflation in nearly a decade

So, same inflation worries, but the Dow went up instead of down.

And, sticking with the same week, the Dow climbed more than 400 points on May 13 and turned in another triple-digit gain on the 14th.

So, to sum it up, during a five-day stretch, the Dow closed higher three times and lower twice.

Does it make sense that investors only paid attention to inflation concerns on a Tuesday and Wednesday, but not on a Monday, Thursday and Friday during the same week? Hardly.

As Frost & Prechter's Wall Street classic, Elliott Wave Principle: Key to Market Behavior, says:

Sometimes the market appears to reflect outside conditions and events, but at other times it is entirely detached from what most people assume are causal conditions. The reason is that the market has a law of its own. It is not propelled by the external causality to which one becomes accustomed in the everyday experiences of life. The path of prices is not a product of news.

Well, if news and events don't drive market prices, what does? The answer is the Wave Principle. Let's return to the book:

The Wave Principle is governed by man's social nature, and since he has such a nature, its expression generates forms. As the forms are repetitive, they have predictive value.

Specifically, a financial market trend takes the form of five waves. After those five waves have unfolded, a new trend in the opposite direction is set to start.

Get more information on how the Wave Principle can help you analyze the stock market so you can prepare for what's ahead.

You can do so by reading the online version of Elliott Wave Principle: Key to Market for free!

All that's required for free access is a Club EWI membership. Club EWI is the world's largest Elliott wave educational community and members are granted free access to a wealth of Elliott wave resources on financial markets, investing and trading.

Let's wrap up with another quote from Elliott Wave Principle: Key to Market Behavior:

After you have acquired an Elliott "touch," it will be forever with you, just as a child who learns to ride a bicycle never forgets. Thereafter, catching a turn becomes a fairly common experience and not really too difficult.

Are you ready to give Elliott wave analysis a try?

Here's the link to follow for free access to the online version of this Wall Street classic: Elliott Wave Principle: Key to Market Behavior.

This article was syndicated by Elliott Wave International and was originally published under the headline True or False: Inflation = Stock Market Sell-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.

Why the Demand for Real Estate Licenses May Soon Fall into a Sinkhole

By this measure, the housing boom may be nearing an end

By Elliott Wave International

A lot of people who've lost jobs have turned to getting their real estate licenses as a path to prosperity.

Part of the mindset that selling houses is worth a try is the belief that prices go up most of the time.

As the Wall Street Journal noted on March 21:

[S]urging prices are persuading tens of thousands more Americans to try their hands at selling real estate.

There have been many other periods of time when home prices have trended higher. However, that's not always the case. As you know, home prices sank significantly following the subprime mortgage meltdown of nearly a decade-and-a-half ago.

But, after that bear market in real estate bottomed, the number of those getting their real estate licenses climbed to new heights.

Yet, the pace is now slowing.

This chart and commentary from the May Elliott Wave Financial Forecast, a monthly publication which offers analysis of key U.S. financial markets, provide insight:

This chart shows the long rise of licensed [real estate] agents. By this measure, the rise of the great American dream can be traced all the way back to the beginning of the last century. The first two waves into the 1920s and the third wave through the inflationary 1970s were quite robust. In percentage terms, the fifth and final wave of the advance from 1983 is more muted, but the inset shows that in nominal terms, it traces out five waves.

Remember, when a fifth wave is complete, expect a turn in the opposite direction.

The question is: Is the trend in the demand for real estate licenses coinciding with the trend in the price of homes?

You are encouraged to read the May Elliott Wave Financial Forecast for insight into home sales and prices -- plus, get Elliott Wave International's analysis of stocks.

The stock market is relevant to real estate because financial history shows that stock prices and housing prices tend to be closely correlated.

If you'd like to learn how the Elliott wave model can help you analyze the stock market, you are encouraged to read the book, Elliott Wave Principle: Key to Market Behavior.

You can gain instant access to the online version of this Wall Street classic for free!

All that's required for free access is a Club EWI membership, which is also free. In case you haven't heard of Club EWI, it's the world's largest Elliott wave educational community (about 350,000 worldwide members.) Members enjoy complimentary access to a wealth of Elliott wave resources on financial markets and investing.

And, speaking of investing, here's a quote from Elliott Wave Principle: Key to Market Behavior:

Always invest with the preferred wave count. Not infrequently, the two or even three best counts comfortably dictate the same investment stance. Sometimes being continuously sensitive to alternatives can allow you to make money even when your preferred count is in error. For instance, after a minor low that you erroneously consider of major importance, you may recognize at a higher level that the market is vulnerable again to new lows. This recognition occurs after a clear-cut three-wave rally follows the minor low rather than the necessary five, since a three-wave rally is the sign of an upward correction. Thus, what happens after the turning point often helps confirm or refute the assumed status of the low or high, well in advance of danger.

Read the entire book to get a rich understanding of how the Wave Principle can help you navigate financial markets.

Just follow this link: Elliott Wave Principle: Key to Market Behavior -- instant and free access to the online version for Club EWI members.

This article was syndicated by Elliott Wave International and was originally published under the headline Why the Demand for Real Estate Licenses May Soon Fall into a Sinkhole. 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.

Elliott Wave Analysis Can Help You See Countertrends. Pattern in Focus: the Zigzag.

This simple, corrective Elliott price pattern helps you anticipate reversals instead of getting run over by them

By Elliott Wave International

Often, as traders and investors we start off with an open mind about playing the field, so to speak. We watch the news, listen to friends and colleagues -- and we try to apply what's known as "fundamental" market analysis to make our trading decisions.

Soon, though, we start to realize that the "bullet-proof" logic of "fundamental" analysis is not Kevlar, but a piece of cardboard. We see markets fall after good news; rally after bad; and go sideways, defying both bulls and bears.

That's when we realize that trading is not as easy as it seems.

At that point, serious traders start to turn to technical market analysis. It doesn't look at the news, or events, or politics, or what the Fed Chairman had for breakfast. It doesn't even look at the name besides the ticker symbol. It looks at the price charts, at the market itself, to determine internal strength, momentum -- and, ultimately, the trend.

One of the leading technical models today is Elliott wave analysis, which teaches that market prices are not random, but patterned. These patterns are constantly unfolding in all liquid markets, on all time frames -- bullish, bearish, lasting over the next few minutes or the next few months.

Take, for instance this chart below of a venerable Big Board stock, global timberland producer and real estate investment trust, Weyerhaeuser Company (ticker symbol WY) -- in May 2020, at the start of the pandemic.

If you'd been tied to the name Weyerhaeuser or the news surrounding its name at that time, you would've likely done one of two things: Shorted the stock or made a hard pass talk to the hand.

Remember, this was May 2020. The world was two months into the worst pandemics in centuries. The global economy had come to a crashing halt, and the future of real estate seemed doomed.

In fact, the mainstream consensus about companies associated with the constructing, buying, and selling of property was terminal. On May 1, 2020, Motley Fool described a single-day bloodbath in Weyerhaeuser and wrote:

**"WY plunged 15% in a matter of seconds... Any company's cutting its dividend is unwelcome, but a REIT's doing so is particularly bad since the REIT structure was created specifically to pass income on to shareholders."

But on May 26, 2020, Elliott Wave International's Trader's Classroom editor Jeffrey Kennedy showed subscribers this bullish chart of Weyerhaeuser:

Why was Trader's Classroom turning bullish when the rest of the world all but wrote WY off?

Because the decline in WY had a signature look of one key Elliott wave pattern: a zigzag. Here, the Elliott Wave Principle -- Key to Market Behavior offers this definition and idealized diagram:

**"A single zigzag is a simple three-wave pattern labeled A-B-C. The subwave sequence is 5-3-5, and the top of wave B is noticeably lower than the start of wave A."

Zigzags are corrections -- i.e., countertrend moves, and signify a temporary break in the larger trend. The significance of WY's completion of this countertrend move was clear: The stock was headed for a powerful rebound.

Press "play" to listen to Jeffrey Kennedy's analysis of WY from his May 26, 2020 Trader's Classroom video lesson in which he calls for a "new bull market."

The next chart captures what followed: WY indeed caught a powerful upwind and rode the current to its highest price level in its 121-year history, a comeback that shocked much of the mainstream financial world and those traders betrothed to a narrow view of market behavior.

In the end, Elliott wave analysis proves that finding opportunity in financial markets is truly unlimited.

It starts with learning the five core Elliott wave patterns. Once you identify a pattern using the Wave Principle, you can then confidently anticipate the direction prices will most likely move next.

The best way to learn these patterns is by reading the "bible" of Elliott wave theory -- the book Elliott Wave Principle: Key to Market Behavior.

You can read the entire online version of the book for free by becoming a member of Club EWI, the world's largest Elliott wave educational community. Club EWI gives you free access to timeless educational resources like lessons, eBooks, seminars, video tutorials, and more -- meticulously curated to create the most comprehensive Elliott wave learning experience anywhere.

Follow this link to get started: Elliott Wave Principle: Key to Market Behavior -- free access.

This article was syndicated by Elliott Wave International and was originally published under the headline . 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.

Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-off?

Markets go where they go. The news is just rationalization.

By Elliott Wave International

As Elliott Wave International has noted many times, the mainstream financial press always tries to find a reason for a given trading day's stock market action.

In other words, if stocks happen to be up for the day, many financial journalists will say it was because of this or that "positive" news. If stocks happen to be down for the day, you got it, these journalists will ignore the positive news and search for something "negative" that happened in the country or world and say that was the reason stocks went down.

Sometimes, the mainstream financial press will use the same "reason" to explain both up and down market action. For instance, on April 22, when the Dow Industrials closed lower by more than 300 points, a major headline said:

Dow closes more than 300 points lower following reports of Biden eyeing capital gains tax hike

Here's what was so ironic: The very next day, as the Dow was trading up for the day by triple digits, the same news outfit ran this headline (April 23):

Dow rebounds 250 points led by banks and tech as market shrugs off higher tax fears

What you need to know is that news does not drive the trend of stock market prices.

If that was the case, the stock market's price pattern would look something like this illustration, which is from Robert Prechter's 2017 book, The Socionomic Theory of Finance. As the book says:

Figure 1 is an idealized representation showing what would be the presumed effects on overall stock prices of [this sample of news items notated within the figure]. Under this causal model, such events would--rationally and objectively--effect a change in overall stock prices.

The problem is, this depiction does not match empirics. That is not how overall stock prices behave.

The factor that really drives the trend of stock market prices is investor psychology, which unfolds as Elliott waves on a price chart.

These waves unfold in repetitive patterns at all sizes of trend. That means that the price patterns you see on an hourly or daily chart are also found on weekly and monthly charts.

Because these patterns are repetitive, they are predictable!

As Elliott Wave Principle: Key to Market Behavior, the Wall Street classic by Frost & Prechter, says:

The Wave Principle is governed by man's social nature, and since he has such a nature, its expression generates forms. As the forms are repetitive, they have predictive value.

Sometimes the market appears to reflect outside conditions and events, but at other times it is entirely detached from what most people assume are causal conditions. The reason is that the market has a law of its own. It is not propelled by the external causality to which one becomes accustomed in the everyday experiences of life. The path of prices is not a product of news. ...

The market's progression unfolds in waves.

You can read the entire online version of the book for free by becoming a member of Club EWI, the world's largest Elliott wave educational community (approximately 350,000 members). Club EWI is free to join and allows you free access to a wealth of Elliott wave resources on financial markets, investing and trading.

Follow this link to get started: Elliott Wave Principle: Key to Market Behavior -- free access.

This article was syndicated by Elliott Wave International and was originally published under the headline Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-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.