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