Bitcoin and other cryptocurrencies were higher on [March 9] after President Joe Biden announced his highly anticipated executive order on digital assets that appeared to take a supportive stance toward the industry.

The basic message of the executive order focuses on development of the crypto market as opposed to unrealistic regulations.

Around midday (March 9), Bitcoin was trading 9.5% higher at just north of $42,200. Litecoin was trading around 9% higher and Ethereum was posting a 7% advance.

It's true that often -- although, far from "always" -- financial markets tend to have brief emotional responses to news, and cryptocurrencies are highly emotional markets in the first place. However, after temporary spikes (whether up or down), markets tend to return to their established trends.

Those trends are ascertained by looking at a financial market's Elliott wave structure, which reflects the repetitive patterns of investor psychology.

In the case of Bitcoin, Elliott Wave International crypto analyst Tony Carrion said this in the March 4 Global Market Perspective, a monthly publication which covers 50-plus worldwide financial markets:

Focusing our attention on Bitcoin, our Intermediate wave model is bullish.

The point is: Bitcoin's Elliott wave structure was already bullish, even before that executive order.

Keep in mind, that just one day before the March Global Market Perspective published, Bitcoin's price rise was not a given.

As a March 3 Marketwatch headline said:

Most big cryptocurrencies post drops

Also on March 3, the Crypto Fear and Greed index showed a reading of 39, which indicated fear. In other words, many crypto observers were bearish. By March 8, that index slid to 21, indicating extreme fear.

Even so, Bitcoin's price action was strongly positive on March 9.

As Elliott Wave International has noted many times, when sentiment reaches an extreme, prices often move in the opposite direction from what the majority expect.

Having said that, Bitcoin has been in a bullish pattern for quite some time and another Elliott Wave International observation is that when the government jumps aboard a financial trend, they usually do so late in the game.

As you might imagine, no analytical method can provide certainty about a market's future price path. However, the Elliott wave model has proven itself time and again.

You can learn how the Elliott wave model can help you forecast financial markets by reading Frost & Prechter's Wall Street classic, Elliott Wave Principle: Key to Market Behavior.

This quote is from the book:

After you have acquired an Elliott "touch," it will be forever with you, just as a child who learns to ride a bicycle never forgets. Thereafter, catching a turn becomes a fairly common experience and not really too difficult. Furthermore, by giving you a feeling of confidence as to where you are in the progress of the market, a knowledge of Elliott can prepare you psychologically for the fluctuating nature of price movement and free you from sharing the widely practiced analytical error of forever projecting today's trends linearly into the future. Most important, the Wave Principle often indicates in advance the relative magnitude of the next period of market progress or regress. Living in harmony with those trends can make the difference between success and failure in financial affairs.

You can read the entire online version of the book for free after you join Club EWI, the world's largest Elliott wave educational community.

Joining Club EWI is free. Members enjoy complimentary access to a treasure trove of Elliott wave resources on investing and trading without any obligation.

Get started by following this link: Elliott Wave Principle: Key to Market Behavior -- free and instant access.

This article was syndicated by Elliott Wave International and was originally published under the headline Bitcoin Jumps 9%: Is This Executive Order the Reason?. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

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