When applying Elliott Wave Theory for graph analysis, we must remember that nothing is certain, only probable. Very often, waves can be confused with others. For this reason, an analyst using such a theory does not have to trace the waves and stand firm on that vision, but must look for future points of validation or invalidation.
To do this, the principles that dominate this theory are used. There are three fundamental ones:
1. Wave 2 never goes below wave 1.
2. Wave 3 is never the shortest wave.
3. Wave 4 never enters the price territory of wave 1, unless we are in the presence of an ending diagonal.
Having said that, let's proceed to the analysis of the Bitcoin Euro pair.
WEEKLY GRAPH:
I usually use the weekly chart to identify the current trend. Looking at the chart, we see that we are in the presence of an uptrend.
DAILY GRAPH:
The daily chart is used to plot summary waves. I have interpreted the graph as in the figure.
After a corrective pattern, I start tracing what for me is wave 1, followed by what for me is a zig zag pattern.
As we can see in the figure, wave C is nearly 1 of fibo wave A. Also, wave C is less decisive than wave A, which indicates a loss of momentum of the corrective pattern. Another confirmation can be seen in the lowering of volumes that accompanies the zig zag.
Then we find wave 3, very extended compared to wave 1 and accompanied by very high volumes.
HOURLY GRAPH:
Turning to the hourly chart, I can see an ending diagonal, which is plausible given the strong push of wave 3. The ending diagonal indicates the exhaustion of the trend. Consequently, I now expect the fourth wave, which is countertrend. I see confirmation of the start of wave 4 from the fact that the price has dropped below wave 4 within the diagonal. Now, keeping to another principle of this theory, we should expect wave 4 in the price arc of wave 4 of a lesser degree of generality.
Obviously, this is just my interpretation. In the next few days, I will update the idea based on the new implications. For now, the general trend is bearish, sideways. I accept any advice.
Thank you !
To do this, the principles that dominate this theory are used. There are three fundamental ones:
1. Wave 2 never goes below wave 1.
2. Wave 3 is never the shortest wave.
3. Wave 4 never enters the price territory of wave 1, unless we are in the presence of an ending diagonal.
Having said that, let's proceed to the analysis of the Bitcoin Euro pair.
WEEKLY GRAPH:
I usually use the weekly chart to identify the current trend. Looking at the chart, we see that we are in the presence of an uptrend.
DAILY GRAPH:
After a corrective pattern, I start tracing what for me is wave 1, followed by what for me is a zig zag pattern.
As we can see in the figure, wave C is nearly 1 of fibo wave A. Also, wave C is less decisive than wave A, which indicates a loss of momentum of the corrective pattern. Another confirmation can be seen in the lowering of volumes that accompanies the zig zag.
Then we find wave 3, very extended compared to wave 1 and accompanied by very high volumes.
HOURLY GRAPH:
Turning to the hourly chart, I can see an ending diagonal, which is plausible given the strong push of wave 3. The ending diagonal indicates the exhaustion of the trend. Consequently, I now expect the fourth wave, which is countertrend. I see confirmation of the start of wave 4 from the fact that the price has dropped below wave 4 within the diagonal. Now, keeping to another principle of this theory, we should expect wave 4 in the price arc of wave 4 of a lesser degree of generality.
Obviously, this is just my interpretation. In the next few days, I will update the idea based on the new implications. For now, the general trend is bearish, sideways. I accept any advice.
Thank you !