Hi traders!
BTC made a stunning recovery. The media was quick to give El Salvador credit for the pump, so let's call it the El Salvador recovery - even though we have no clear idea when their central bank will begin to accumulate Bitcoin.
What happened?
We can assume that this was a major short squeeze, and more SLs are to be expected right above the upper triangle line (black). If BTC goes higher from here, a cascade of buy orders can possibly skyrocket the price.
What is next?
The wave count shows that BTC is at the end of the 1-5 impulse wave though. Wave 3 is quite extended - in that case we can add the length of Wave 1 to get a target. Another method is to extend Wave 3. I have charted both variations.
The red boxes are possible reversal levels, where we can expect one of two things:
+ A flat ABC correction = more ranging & going higher afterwards
+ A breakdown with lower lows
Can we break down from here?
Absolutely. It would be another move to wash out those traders who were buying late into this pump - or opened positions into resistance. Remember that we have no clear indication of institutional buying, which would signal a bottom! Goldman Sachs said they are not interested to buy above 30k, and we know that the big banks can manipulate price until they get the levels they see fit for their accumulation.
How to trade it?
Bears can try short entries at the levels marked in red. Bulls have to wait for a better setup, since the Elliott count shows us resistance ahead. If BTC pumps above the triangle, a re-test is necessary since we had too many fakeouts recently.
Happy trading!
BTC made a stunning recovery. The media was quick to give El Salvador credit for the pump, so let's call it the El Salvador recovery - even though we have no clear idea when their central bank will begin to accumulate Bitcoin.
What happened?
We can assume that this was a major short squeeze, and more SLs are to be expected right above the upper triangle line (black). If BTC goes higher from here, a cascade of buy orders can possibly skyrocket the price.
What is next?
The wave count shows that BTC is at the end of the 1-5 impulse wave though. Wave 3 is quite extended - in that case we can add the length of Wave 1 to get a target. Another method is to extend Wave 3. I have charted both variations.
The red boxes are possible reversal levels, where we can expect one of two things:
+ A flat ABC correction = more ranging & going higher afterwards
+ A breakdown with lower lows
Can we break down from here?
Absolutely. It would be another move to wash out those traders who were buying late into this pump - or opened positions into resistance. Remember that we have no clear indication of institutional buying, which would signal a bottom! Goldman Sachs said they are not interested to buy above 30k, and we know that the big banks can manipulate price until they get the levels they see fit for their accumulation.
How to trade it?
Bears can try short entries at the levels marked in red. Bulls have to wait for a better setup, since the Elliott count shows us resistance ahead. If BTC pumps above the triangle, a re-test is necessary since we had too many fakeouts recently.
Happy trading!