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11.02.2025 08:35 AM
Wave analysis of BTC/USD on February 11. Bitcoin trapped in range-bound market

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The wave structure of the 4-hour chart for BTC/USD appears completely clear. After a long and complex a-b-c-d-e corrective structure, which formed between March 14 and August 5, a new impulse wave began to develop, already taking a five-wave form. Judging by the size of the first wave, the fifth wave might turn out to be shortened. Based on this, I do not expect Bitcoin to rise above $110,000 - $115,000 in the coming months.

Additionally, wave 4 has taken on a three-wave structure, confirming the accuracy of the current wave count. The news environment has supported Bitcoin's rally due to continuous inflows of investments from institutional traders, governments of some countries, and pension funds. However, Trump's policies could force investors to exit the market, and an uptrend cannot last forever.

Currently, the structure of wave 2 within wave 5 raises doubts about whether it is actually wave 2 of 5. I tend to believe that the bullish trend is nearing its end.

Bitcoin gets stuck in limited trading range

BTC/USD rose by $2,500 on Monday. However, Bitcoin remains within a sideways range, and that is the most important factor right now. Of course, there are significant movements within this $20,000 range, but there is no clear trend at the moment.

According to the current wave count, the bullish phase is over. I still believe we are at the beginning of a complex and prolonged correction or a new bearish trend.

On Monday, there was practically no significant news, but a few noteworthy events occurred. However, the market barely reacted to them. I don't see a direct connection between Trump's new tariffs and the rise of either the dollar or Bitcoin. Both the dollar and Bitcoin are rising on such news, which contradicts common sense.

Nevertheless, some may argue that Bitcoin's growth was fueled by Trump's tariffs, but this time, the increase was minimal.

Monetary policy is more important than Trump's tariffs.

Currently, the Federal Reserve's monetary policy plays a more significant role. For the past two years, the market has been actively investing in Bitcoin and stocks, anticipating a dovish Fed policy. In simple terms: the lower the Fed's interest rates, the lower the returns on bank deposits, bonds, and other "safe" instruments. Therefore, capital has been flowing from safe assets into riskier ones for the past two years. However, the Federal Reserve has been cutting rates for six months now, so the capital rotation should have already ended.

When Trump returned to power, he made many pledges regarding cryptocurrency, including:

  • To improve cryptocurrency regulation
  • To create a national Bitcoin reserve

Yet, none of these promises have been fulfilled so far.

As a result, Bitcoin currently lacks solid reasons to enter a new bullish cycle without a proper corrective structure.

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Key takeaways

Based on the wave analysis of BTC/USD, I conclude that the asset's growth is nearing its completion. The fifth wave could be shortened, which is an unpopular opinion but remains a valid possibility. If this assumption is correct, we are in for a collapse or a complex correction. Buying Bitcoin right now is not advisable. In the near future, Bitcoin could drop below the low of wave 4, confirming the transition to a new bearish trend. On a higher wave scale, we still see a five-wave bullish structure, but a corrective or bearish structure is likely to form soon.

Key principles of my analysis:

  • Wave structures should be simple and clear. Complex patterns are difficult to trade and often change.
  • If you are uncertain about the market trend, it's better to stay out.
  • There is no 100% certainty in price direction. Always use Stop Loss orders to protect your positions.
  • Wave analysis can be combined with other analytical methods and trading strategies for a more comprehensive approach.
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