Bitcoin’s bull flag pattern and Fibonacci align at $136K

In our previous update from June 10, when Bitcoin (BTC) was trading at around $108760, we showed by using the Elliott Wave (EW) Principle, that “either Bitcoin’s correction is over (green W-2 low) or it will subdivide into the gray 'alt: a, alt: b, alt: c’ path… A drop below last week’s low [$100418] would … aim ideally for $95 +/- 3K before the third wave begins, which could then lead to at least $156K.” The market chose the alternative route, bottoming at $98240 on June 22, and is back at the scene of the crime today, reaching as high as $108182. See Figure 1 below.

Figure 1. Bitcoin’s daily price chart with our preferred EW count

Moreover, we viewed the entire setup as a “pay me now vs. pay me later issue, focusing on the risk versus reward: $15000 risk versus $50000 reward. This means we see the forest for the trees: any deeper pullback is still a buying opportunity that will result in increased reward.” Given the round-trip in price and because BTC reached the ideal target zones that were bought, we maintain our Bullish stance.

In fact, Figure 1 shows that a potential Bull flag is forming (dotted black lines), and a breakout above the upper descending trendline targets approximately $136000. This level is exactly at the 100.00% extension of the green W-1, measured from the June 22 low at around $98K, and represents a typical 3rd of a 3rd wave target within a standard Fibonacci-based impulse pattern as shown: gray W-iii of the green W-3.

Thus, the rally from the June 22 low should be the gray W-i, and a brief pullback for the gray W-ii should be one’s final chance to get on the bull train to at least $136K. However, there should be plenty left in the tank from that level, as we would still need the gray W-iv, v, and green W-4, 5 to ultimately and ideally reach $174K, assuming the standard Fibonacci-based path is followed.

This still aligns well with our ideal target range of $164,000 to $216,000 to be reached by year’s end.