BTC in Algoland: micro counting vesus long term outlook
Game plan: from 43k level take short position targeting minimally 38k, stop at 45k.
Feel free to zoom in or out this chart with ID chart/aR6LPQG1, as this new account is not allowed to insert url of charts yet.
Usually I consider micro-counting Elliott Wave not quite reliable, and frankly not necessarily and bad for my mental state. But staring at the 15min chart of bitcoin on Binance, I noticed a (5) waves up rally. After pulling out the Fibonacci levels to measure the movement, I'm yet again amazed how the nature tends to work.
Note that the price of BTC varies across different exchanges. It is a feature not a bug, a proof of the decentralization of this digital asset. So please take the price levels mentioned below with a grain of salt.
Off the low of 10-Jan-2022 around 39.6k, wave (1) rallied to 42.1k, then (2) retraced perfectly to 0.382 of (1). Wave (3) got probably the longest duration of this 5 waves and rallied to 42.6k, while (4) retraced to 41.2k. The extension of (1) (purple fibs) and the extension of (3) (azure fibs) coincide at 43.1k, which is perfectly hit by what I view as nano wave 3 of (5). I have my eyes on 43.4k as initial target of 5 of (5), it's where the 1.5 extension of (1) coincides with the 1.236 extension of (3).
Are you not amazed by the fact that many fib levels across multiple time frames have been the turning points of the price movement? Or was it just algorithmic trading bots respecting the preprogrammed rules :)
One important reason of me not seeing current micro rally going much higher is the clusters of fibs identified on the 4hour chart, placing an immediate resistance at about 44k.
On a bigger picture, sinds the ATH in Nov. 2021, BTC has retreated more than 40% nominally. While measured from the Jun. 2021 low, BTC reached the 0.618 retracement.
As I expect the current micro rally to finish at around 43k, how the coming correction behave will give some hints on whether the end of the distribution phase is near.
My primary expectation is the correction from the ATH is not yet over, as the initial drop (A) and the subsequent rebounce (B) formed the right shoulder of a Head and Shoulders pattern. The ongoing (C) moves pass the neck line and projects down to first 38k and then 32k support, with potential extension to 28k. Respecting the 28k support is important to avoid the danger of a double top formation.
How ever, if BTC doesn't break down to 38k but rather makes a higher low and recover 44k, that would be the first indication that the bottom is in.
Disclosure:
Long term long BTC.
Short term short via leverage tokens BTCDOWN, will gradually switch them to BTCUP under 35k.
Feel free to zoom in or out this chart with ID chart/aR6LPQG1, as this new account is not allowed to insert url of charts yet.
Usually I consider micro-counting Elliott Wave not quite reliable, and frankly not necessarily and bad for my mental state. But staring at the 15min chart of bitcoin on Binance, I noticed a (5) waves up rally. After pulling out the Fibonacci levels to measure the movement, I'm yet again amazed how the nature tends to work.
Note that the price of BTC varies across different exchanges. It is a feature not a bug, a proof of the decentralization of this digital asset. So please take the price levels mentioned below with a grain of salt.
Off the low of 10-Jan-2022 around 39.6k, wave (1) rallied to 42.1k, then (2) retraced perfectly to 0.382 of (1). Wave (3) got probably the longest duration of this 5 waves and rallied to 42.6k, while (4) retraced to 41.2k. The extension of (1) (purple fibs) and the extension of (3) (azure fibs) coincide at 43.1k, which is perfectly hit by what I view as nano wave 3 of (5). I have my eyes on 43.4k as initial target of 5 of (5), it's where the 1.5 extension of (1) coincides with the 1.236 extension of (3).
Are you not amazed by the fact that many fib levels across multiple time frames have been the turning points of the price movement? Or was it just algorithmic trading bots respecting the preprogrammed rules :)
One important reason of me not seeing current micro rally going much higher is the clusters of fibs identified on the 4hour chart, placing an immediate resistance at about 44k.
On a bigger picture, sinds the ATH in Nov. 2021, BTC has retreated more than 40% nominally. While measured from the Jun. 2021 low, BTC reached the 0.618 retracement.
As I expect the current micro rally to finish at around 43k, how the coming correction behave will give some hints on whether the end of the distribution phase is near.
My primary expectation is the correction from the ATH is not yet over, as the initial drop (A) and the subsequent rebounce (B) formed the right shoulder of a Head and Shoulders pattern. The ongoing (C) moves pass the neck line and projects down to first 38k and then 32k support, with potential extension to 28k. Respecting the 28k support is important to avoid the danger of a double top formation.
How ever, if BTC doesn't break down to 38k but rather makes a higher low and recover 44k, that would be the first indication that the bottom is in.
Disclosure:
Long term long BTC.
Short term short via leverage tokens BTCDOWN, will gradually switch them to BTCUP under 35k.
Trade active:
Micro rally looks complete, short another tranche at 44.2k, stop at 46k.
Outlook:
To the downside, expecting some support at 42.6k, will short one last tranche under 42k;
To the upside, watching clusters of fibs at 45.7k and 47.5k, decisive break above 47.5k signals correction is over.
15min chart publicly available: /chart/aR6LPQG1/
1h clean up chart screenshot: /x/KZAgs3hl/
1D bigger picture screenshot: /x/YszrqR6E/
RSI should stay under the downward trend line the next few days, if bear case is correct.
Outlook:
To the downside, expecting some support at 42.6k, will short one last tranche under 42k;
To the upside, watching clusters of fibs at 45.7k and 47.5k, decisive break above 47.5k signals correction is over.
15min chart publicly available: /chart/aR6LPQG1/
1h clean up chart screenshot: /x/KZAgs3hl/
1D bigger picture screenshot: /x/YszrqR6E/
RSI should stay under the downward trend line the next few days, if bear case is correct.
Trade closed: target reached:
Closing two third of the short position at 38k, stop for the remainder at 40.8k.
Not aggressively adding long position yet, wait and see how the rebounce and the broad market behave on the opex day.
Not aggressively adding long position yet, wait and see how the rebounce and the broad market behave on the opex day.
Trade active:
Stop for the remainder moved to 38.8k.
Thought there would be some bounce back up from 38k-39k so exited the larger short position early, should have used trailing stop instead of limit order.
Very profitable trade nonetheless.
Next support for bulls: 35.4k and 33.5k BUSD
Thought there would be some bounce back up from 38k-39k so exited the larger short position early, should have used trailing stop instead of limit order.
Very profitable trade nonetheless.
Next support for bulls: 35.4k and 33.5k BUSD
Trade active:
Stop for the remainder moved to 36.2k.
35.4k support got breached and currently acting as resistance.
Structure favors one more leg down, but at least a corrective bounce should be on the horizon.
Not even consider the return of the bull until 43k is recovered.
35.4k support got breached and currently acting as resistance.
Structure favors one more leg down, but at least a corrective bounce should be on the horizon.
Not even consider the return of the bull until 43k is recovered.