Good morning, traders. Yesterday, I put out a FOMO bull case as has been requested numerous times, so tomorrow I will put out a bear case. Today we will take a look at what happened overnight and see how it compares to what we've been looking at lately since a lot of traders are confused and scared. If you've been in Discord with us, then you know that our admin, Scott, has been mentioning the impending bear div and what needed to happen to overcome it. Ultimately, price was not able to do what needed to be done at this time and it appears that a very short subwave 5 completed wave 3. I tend to get a bit antsy when such a short wave 5 prints but, as I mentioned when price first squeezed up, a large, strong wave 3 can result in a short 5. Furthermore, I have continued to warn against trading wave 5s as they tend to be a lot more erratic as far as their targets go. If you've been watching any of the liquidation bots available on other social media sites or as stand alone apps, then you have seen significant liquidations of shorts and longs over the past week do to this. Don't be those traders. Stop throwing your money away by YOLOing as you attempt to catch the bottom or top. It's worse than buying scratch off tickets. Most Elliott Wave traders will not touch a wave 5 for this reason. Remember, if you're a bear then this latest strong move up has been a part of Wave C of Wave 4, which means you will be looking for a new lower cycle low to complete wave 5 after this final move up. While the bear case appears a lot less likely at this time due to general market cycles, CME volume on that push up, and historical Bitcoin market cycles (most notably, halving coming up in just about a year), until price closes above $6500 you should still keep the bear scenario in mind to help you concentrate on risk management. Like I said, I will go over that bear case tomorrow.
Yesterday, I stated that "....price broke through the triangle resistance and this should create a target of $5465 based on the height of the triangle....," and price actually ended up hitting a high of $5466.06. Yes, I gave some higher targets as well, but this is why you should never ignore the height of the triangle even if the triangle looks like part of a pennant, especially when you're trying to find wave 5 targets. The height of the triangle, as you can see, gave the perfect target. We should expect subwave 1 of wave 5 to likely be rejected at the supply zone around $5400-$5500 with subwave 3 pushing through it. Currently, the 1H TF is oversold and the 4H TF RSI is sitting at 41.45 which is slightly bearish. However, 4H Stoch RSI has bottomed and is possibly about to signal a bullish cross. If we see any further downside, so that 4H RSI hits oversold, I expect the pivot at $4863 to support price. As we can see, that is also the top of the ascending channel. Price falling through this level would likely suggest further downside and I would then be looking at the channel's EQ to support price at around $4220-$4240, depending on how long it takes price to get there. That would also be the supply-turned-demand zone at the top of the large TR that appears to have created the bottom of the cycle, which I usually look for price to return to after a breakout of the TR -- a retest of resistance as support. However, wave 4 generally doesn't drop below the wave 4 of the lesser degree, so this has me watching $4778.59 as the point at which price should not be dropping through before heading up to complete wave 5. This is where it is important to pay attention to the higher TFs. When I say that I am looking for levels to support price, I am talking about the 4H candle and larger. This doesn't mean we can't see a wick lower on those candles, but we are expecting to see price ultimately supported around the price level given.
So where can we expect wave 5 to target? I am looking for $5774 at least, as long as price can move above $5650. If it can't, then it is possible would could see wave 5 end right there. Moving beyond it gets price right into the $6000 zone's resistance. But I am planning on the wave actually reaching the EQ at $5950. With enough FOMO on the final subwave 5 of wave 5 push, we could even see price tap the 261.8% extension of wave 1 at $6040 which also happens to be the bottom of the HVN. I don't expect this all to happen overnight, however. Wave 4 should take a few days to, possibly, a week to complete depending on whether we get a simple ABC or more complex correction. This will give alts time to produce some profits, so traders should be looking at alt entries rather than attempting to trade this Bitcoin retracement.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
Yesterday, I stated that "....price broke through the triangle resistance and this should create a target of $5465 based on the height of the triangle....," and price actually ended up hitting a high of $5466.06. Yes, I gave some higher targets as well, but this is why you should never ignore the height of the triangle even if the triangle looks like part of a pennant, especially when you're trying to find wave 5 targets. The height of the triangle, as you can see, gave the perfect target. We should expect subwave 1 of wave 5 to likely be rejected at the supply zone around $5400-$5500 with subwave 3 pushing through it. Currently, the 1H TF is oversold and the 4H TF RSI is sitting at 41.45 which is slightly bearish. However, 4H Stoch RSI has bottomed and is possibly about to signal a bullish cross. If we see any further downside, so that 4H RSI hits oversold, I expect the pivot at $4863 to support price. As we can see, that is also the top of the ascending channel. Price falling through this level would likely suggest further downside and I would then be looking at the channel's EQ to support price at around $4220-$4240, depending on how long it takes price to get there. That would also be the supply-turned-demand zone at the top of the large TR that appears to have created the bottom of the cycle, which I usually look for price to return to after a breakout of the TR -- a retest of resistance as support. However, wave 4 generally doesn't drop below the wave 4 of the lesser degree, so this has me watching $4778.59 as the point at which price should not be dropping through before heading up to complete wave 5. This is where it is important to pay attention to the higher TFs. When I say that I am looking for levels to support price, I am talking about the 4H candle and larger. This doesn't mean we can't see a wick lower on those candles, but we are expecting to see price ultimately supported around the price level given.
So where can we expect wave 5 to target? I am looking for $5774 at least, as long as price can move above $5650. If it can't, then it is possible would could see wave 5 end right there. Moving beyond it gets price right into the $6000 zone's resistance. But I am planning on the wave actually reaching the EQ at $5950. With enough FOMO on the final subwave 5 of wave 5 push, we could even see price tap the 261.8% extension of wave 1 at $6040 which also happens to be the bottom of the HVN. I don't expect this all to happen overnight, however. Wave 4 should take a few days to, possibly, a week to complete depending on whether we get a simple ABC or more complex correction. This will give alts time to produce some profits, so traders should be looking at alt entries rather than attempting to trade this Bitcoin retracement.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.