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

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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.

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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.

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