Bitcoin remains in fourth gear, with all signs still pointing to a rally to $164K

In our previous update, Bitcoin (BTCUSD) showed strong potential to rally to $164K. However, since we are all wrong until the markets prove us right, we always provide warning levels, which, in this case, tell us the rally ends:

“Warning levels for the Bulls: first, blue, at $113,143 (There is a 25% chance that the uptrend is over); second, grey, at $121,020 (50% chance); third, orange, at $117,981 (75% chance); and fourth, red, at $114,866 (100% chance that the uptrend is over)”

These levels can act as stops to lock in gains or prevent further losses. Three days after our update, Bitcoin dropped to $105,833 intra-day, invalidating the bullish Elliott Wave (EW) count. Fast forward, BTC fell to as low as $98,932 yesterday, November 4. That’s 16% and 14% below our orange and red warning levels, respectively, showing loss mitigation.

From an analytical perspective, we also had to adjust— or, as we always say, “all we can do is anticipate, monitor, and adjust as necessary.” See Figure 1 below. We now classify the $124,532 high as red W-iii, with an ongoing (red) W-iv, called an irregular expanded flat in EW terms, where the green W-c might be evolving into a double zigzag.

Figure 1. Bitcoin’s short-term Elliott Wave count with warning levels for the Bears

The red target zone corresponds to the 23.6% to 38.2% retracement of the entire red W-iii, also shown in Figure 2 below. Additionally, the gray target zone marks where we expect the gray W-c to complete, although we cannot rule out the orange W-4, 5 setup, which points toward the lower end of the gray W-c target area. Since Bitcoin is in a downtrend, we now have warning levels for the bears that, when broken, increase the likelihood that the downtrend is over.

Warning levels for the Bears: first, blue, at $106,319 (There is a 25% chance that the downtrend is over); second, grey, at $111,199 (50% chance); third, orange, at $116,395 (75% chance); and fourth, red, at $124,532 (100% chance that the downtrend is over).

Figure 2. Bitcoin’s long-term Elliott Wave count since December 2017, with halving dates

Figure 2 shows that the green W-1 of the red W-iii was approximately $49K, while the green W-3 was about $60K, roughly 1.23 times W-1. Short, but not an unusual Fibonacci extension for a 3^rd wave. Additionally, the green W-5 of the red W-iii was around $50K, representing a typical 5=1 relationship. This resulted in the red W-iii reaching a 2.23x extension, which is quite typical for an extended 3rd wave. Overall, the waves displayed align with common Fibonacci extensions and relationships, while still following all EWP rules. Meanwhile, the blue box indicates the typical 4th-wave retracement zone of $86,581-101,149, which has already been reached, and the red box highlights the common extended 5th-wave target zone of $164,361-216,440.

Thus, despite the recent detour, Bitcoin remains in fourth gear with all signs pointing toward a rally to $164K. A drop below $86K would strongly indicate that $126,272 was the peak on October 6 and that the purple C4 wave to around $20,000 ± $2,500 is now beginning. However, our long-term trading system* will also need to signal a sell, as it did in August 2014 (not shown), June 2018, and January 2021, to confirm that the top has been reached. Lastly, sentiment is currently near key bottom levels; the Fear and Greed Index was at 21 yesterday, although data has been available only since early 2018. See Figure 3 below. Such negative sentiment can pave the way for the next rally.

*Green and red boxes in Figures 2 and 3 show our long-term trading system’s signals, which have generated a 508,225% return from 08/2011 through 09/2025.

Figure 3. Bitcoin’s price overlaid with past and current sentiment (fear and greed index)