Bitcoin: Symmetrical Triangle Consolidation 6H (May 31)

X Force Global Analysis:


Despite the bears' attempt to drive prices below the significant support at 8.8k regions, BItcoin's bulls have managed to not only hold support, but also demonstrate a comeback with immense momentum and strength, that has also ignited a bullish rally for certain altcoins. In this analysis, we explore the probability of Bitcoin having potentially bottomed out.

Analysis

- The first thing to note is that we are trading in a symmetrical triangle pattern
- While this could be seen as a phase of distribution before a drop, from a prejudiced bearish perspective, elliott wave counts suggest otherwise
- We have seen a clear impulse wave count (!2345) up to 10K resistance levels
- In lieu of a textbook corrective wave count (abc), Bitcoin began to consolidate, counting elliott triangle waves (abcde)
- Waves a,b,c, and d have already completed, and we are seeing sings of Bitcoin potentially completing wave e.
- Based on fibonacci retracement levels and trend line support, we can expect wave e to play out down to 8.8k regions
- Other evidence that adds weight to the case of seeing a corrective wave e is the bearish divergence that has formed on the 6H
- Prices have formed higher highs, while the Relative Strength Index (RSI) has formed technical lower highs
- We can also note that the Moving Average Convergence Divergence (MACD) shows decreasing bullish histograms, looking to form a dead cross, signaling a short term trend reversal

Market Sentiment:

Long short ratios are at 70 to 30, with still significantly more long positions than shorts. The market sentiment is extremely bullish, especially due to certain altcoins also showing strong bullish momentum.


What We Believe

Should we see wave E play out, but in lieu of bouncing off 8.8k, prices break and close below the ascending trend line support, we believe this would provide confirmation for a bearish trend. On the other hand, should we see a breakout take place - and instead of a rejection at 10.5k, we break and close above it - it should provide confirmation for a bullish trend. Without any further confirmation, Bitcoin should be considered at neutral levels.

Trade Safe.