First, let's take a look at two important levels, which are key triggering levels :
- 4100 (green line) is now a huge horizontal resistance
- 3800 (red line) is now a huge horizontal support
Then, let's consider :
- purple and yellow lines are candidates as trend supports for a possible bull run
- there is no serious as resistance except for the 4100 and 4400 levels
Let's continue with patterns :
- we are obviously forming an between ascending supports and 4100 level ( )
- we broke out of a diamond with a target higher than 4100 ( )
- I have adjusted my ascending supports more horizontally with each new higher low ( ? healthy accumulation ?)
- you all expect to read something about a famous shampoo here, so I won't say it : this pattern is useless in my opinion. Either complete (= too late) or uncomplete (= wild guess)
Let's finish with count :
- we have a clean 12345 impulse as december 15 -> 24 bull run
- we have an unclear retracement pattern since then : purple followed by purple 12 complete ? yellow ABCDE or WXYXZ ?
- theory suggests at least one more impulse upwards like the 15 -> 24 bull run, to complete an of higher degree
Considering that oscillators and other indicators look more and more neutral to me as sideways action progresses, I am technically , due to counts and patterns in play. But we are in early january, a historically bear time zone for BTC , and stocks are crashing. So, a technically unexpected breakdown could happen at any time.
Taking into account the low volumes of all this action and the undecisive behavior of BTC lately, I'm taking a neutral stance, while setting up stop orders to avoid missing the huge candle I'm expecting.
Bull scenario : 4100 finally gets broken in confident volumes, leading to an impulse upwards targeting 4400 and probably 4800. Trouble here is a fakeout followed by a massive dump. Still, I have set a stop buy order slightly above 4100 to play the huge move I'm technically expecting (= FOMO). Moreover, I'm presently in a very small long position since I favor the outcome.
Bear scenario : fails, breaking down all supports. In my opinion, breaking below last higher low of 3771 and therefore the 3800 support is a point of no return. Anything higher than that is still acceptable for the case. Therefore, I have a stop sell order slightly below 3771 in place. A smarter and more conservative approach in this case would be to acknowledge the breakdown of 3771 as a sign, then open a short on a confirmation of a higher low. Still, the perspective of a huge candle makes me eager to ride it (= FOMO)
Unfortunately, I don't know how to set stop-losses on Bitfinex before one of those entry points is triggered, which leaves me at the mercy of fakeouts. If you know how to activate a stop-loss AFTER another order has been triggered, I'm highly interested in your help.
The way you see the pattern is almost irrelevant in Elliott theory : we are correcting a bullish impulse, and therefore we expect a bullish breakout after this correction, to form a probable (A)(B)(C) on a higher time frame.
From this point of view, we are waiting for the end of the current correction, which I label as an ABCDE ascending triangle on Bitcoin, to finish the (B) wave, and expect an imminent breakout of sideways action to start (C) wave.
Now, let's look for a bearish scenario. The only SIMPLE scenario I can see is a standard ABC correction (in red) for a severe overall correction of previous bull run. I don't favor it on BTC because subcounts don't work for me on small time frames, and because we already hit the 0.618 ratio for this correction.
Yet, ETH price action has formed an ascending wedge instead of a triangle, and with same counts looks much more bearish than BTC. Since correlation is rule, I'm puzzled now.
Still in a careful long trade. Fingers crossed, and stop-losses as tight as possible while trying to avoid a fake breakdown...
Next thoughts and updates here :