Elliott Wave Analysis Predicts Bitcoin Could Hit $40,000 Before a Major Rally

A technical analyst known as ‘V’ has shared an intriguing forecast based on the Elliott Wave Theory, suggesting that Bitcoin may first drop to $40,000 before experiencing a substantial rise. This multi-year projection illustrates a potential downward correction, followed by a strong bullish surge that could catch many investors by surprise.

Key Takeaways

Analyst ‘V’ anticipates a significant decrease in Bitcoin's price to around $40,000.
The market could initially see a Wave 2 correction, potentially ranging between $51,000 and $62,000.
A subsequent relief rally could mislead investors, leading to a deeper drop before a powerful recovery.
The expected bullish reversal could propel Bitcoin to new all-time highs, with a target of $150,000.

Bitcoin

Elliott Wave Analysis Suggests $40,000 Bitcoin Price Drop

The analysis shared by V on the social media platform X highlights a completed five-wave structure that has propelled Bitcoin from its lows in 2022 to an expected peak in early 2025 around $109,354. This series of waves, clearly labeled as 1 through 5, marks the completion of Bitcoin's initial significant impulse movement.

Following this, V predicts that Bitcoin may enter a Wave 2 correction, which could manifest as an ABC zigzag pattern. In this scenario, Wave A is forecasted to bottom out between the 50% and 61.8% Fibonacci retracement levels, leading to a price decline potentially between $51,000 and $62,000.

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Source: Chart from V on X

In the next phase, Wave B is expected to provide a small reprieve, pushing Bitcoin back towards the 100% to 132% extension zone, estimated between $109,354 and $120,594. Once this recovery occurs, V anticipates a significant decline in Wave C, projecting that Bitcoin’s price could fall to a range of $51,336 to $35,564, indicating a drastic decrease of 55% to 69% from prior levels.

Interestingly, V notes that this potential move towards the lower target could take many investors and traders by surprise. A recovery rally back towards the $100,000 mark in Wave B could renew investor optimism and entice more buyers, only for the market to then experience a steep downturn once again. Essentially, this could become a trap for bullish investors.

The Surprising End Game for Bitcoin

After the expected completion of the Wave 2 correction, V forecasts the beginning of Wave 3, a phase likely to spark a strong bullish turnaround for Bitcoin. The analysis depicts a projected rally, indicated by a rising arrow on the chart. Bitcoin is predicted to retest its previous resistance level around $109,354, suggesting a potential gain of over 207% from the projected Wave C low near $35,564.

Once Bitcoin surpasses this resistance with significant momentum, the chart forecasts an ambitious upward trajectory towards a surprising target of $150,000. It's worth noting that the last time Bitcoin approached this level was in October 2025, when its price soared beyond $126,000. If V's Elliott Wave predictions come true, it could signal a new historic all-time high for BTC.

Bitcoin
BTC trading at $67,056 on the 1D chart | Source: BTCUSDT on Tradingview.com