BTCUSD - short term action down to 7.5k

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
If you review my previous post (BTC - $8.2k for a bottom), you would have seen I was looking for an 5-3-5 ( ABC ) structure within this wave down. This could still materialise and take us to 6k and below. However, in the short term I think we will complete the initial 5 waves down to around 7.5k (with a long wick to 7k a possibility) and I will then reassess the situation from there.

There are numerous waves counts that could be projected here. My thanks to @acel for bouncing a load of these around with me today. My conviction is the following:

1) Primary Wave 1 completed down to 9.5k
2) Primary Wave 3 is under way with Minor Wave 3 complete and the Minor Wave 4 retrace under way. This will likely go to around 9 - 9.3k (0.619 and 0.786) retrace.
3) The Minor Wave 5 will continue down to one of the following:
- 8.4k for a double bottom (0.618)
- 8k (1:1)
- 7.5k (1.272)

Minor Wave 1 and 3 are a 1:1 ratio and wave 3 can not be the shortest. So I expect Minor Wave 5 to be longer with a target of 7.5k but a long wick potential of 7k (1.618). There is quite a bit of support at 8k so we may stop here.

The Final Primary Wave 4 & 5 will then need to complete, but I'll review that when it comes.

My plan
I will wait for this Minor Wave 4 to get to the 0.618 / 0.786 area and short with a target to buy back at the bottom of the Primary Wave 3. I will then review the situation for longs or another short.
Comment: Scenario 2 that could unfold is shown below. In this, wave 5 has completed and are now up for an ABC or new 5 wave impulse.

Buying or selling now is a gamble without clear places to mark stop losses.

Scenario 1
To go short, I will want to see a reversal around the trend line with 5 waves within the C completed. I will set a stop loss not far above it, so if this is going up I wont get burnt.

Scenario 2
If my conviction is wrong, I will get stopped out for a small loss. I would then look to enter a trade on the retrace at 9k.

Comment: Over the next few hours I still expect this to go up. We are completing the Minute Wave 3 and a 0.618 retrace is expected before the final Minute Wave 5 up.

Comment: Wave 3 retrace was just past 0.718. Wave 5 is going to be small, 1:1 up to 9.2k but it could truncate. Then I think we could see the next drop or a triple bottom.

Comment: Anyone thinking of going long at this point, just be careful of the coming resistance at the grey down trend line, 0.38 fib, top of parallel channel of this wave and end of 5th wave in ABC. It's almost a perfect short set up. A short here with a stop at 9650 and target of 7.5k at the bottom of the diagonal would give a large 7:1 ratio. Probably better to wait for a close above this if you are inclined to go long. I am not at this stage.

Comment: I’m away skiing so not much time to update. So far exactly to plan. ..
Comment: That’s wave 5 down done with three minor counts in it. Ended up at just under a 0.618 extension.

That last retrace up to 9500 was a 0.382 of the whole wave down rather than just wave 3. In fact it retraced right into the last wave ii. This is allowed as part of EW theory if it is an expanding ending diagonal but it is uncommon. So something could be off on the 5 wave count down and we finished that initial wave down on the 9 March.

This could be a double bottom and a trade option is to buy on the next minor pull back on the 1 hr chart with a stop at 8300, but it’s not for me.

I need to see more confirmation of structure before trading either way. I’m not spending much time on it this week because of holiday, you could check out @acel BTC post in the meantime.
Comment: I think this is the most likely next action

Comment: Updates here:


Hi @monkia , I am getting lost alittle. So the orange you have marked is the wave 3 of wave V down,right?
Have fun skiing :-)