BTC - The #@$*&@! is Over (We Hope) - So What is Next?
Summary: Bitcoin is currently painting a short term bear flag within a long term bull flag. The correction of the past few weeks led Bitcoin to a strong support with the possibility of a bullish breakout, but no matter the direction of breakout, I envision some consolidation between the 30k and 40k ranges first as this is a very good opportunity for MM/whales to accumulate more Bitcoin before the next leg up. If we do see another prolonged accumulation, watch for occasional bullish breakouts, the well-timed fud in the news, and small corrections to shake off paper hands so they can accumulate more Bitcoin. This is invalidated if we close below 35k, which could lead to deeper corrections.
Details: Bitcoin is trending down in the final leg of a corrective five-wave pattern started in March. On a smaller timeframe it is painting a 2 week long series of corrections-turned-bull flag; and we are looking for Bitcoin to break above the resistance at the top of the channel but until it does expect it to continue down this flag.
Given that 38k is forming a short term floor in this range, the next drop down could bounce from there towards a potential bullish breakout from the bull flag. I don't envision a strong breakout in either direction and strongly suspect that no matter how it breaks, we'll see consolidation between one of two ranges. I provided a bearish and bullish scenario, each with a ~10% range of volatility to move within before it's next big move, probably not before June.
When will we leave the 30k-40k range? Bitcoin could consolidate here for anywhere from 1 week to several months. I say 1 week because historically the 4th week of the month, in this cycle, is when Bitcoin breaks bullish. I also say it could be longer because consolidating here is a very good buying opportunity that I don't expect MM to give up quickly. That said, there is a small possibility of an early bullish breakout over 50k this week, due to entering an aggressive correction a little earlier in May accelerating the monthly cycle and wiping some stagnation from the Bitcoin price actions.
What to watch for? First look for a breakout and confirmation from this bull flag. Once we break into one of the two ranges, look for the consolidation pattern to firm up before entering trades. Keep an eye on the 45k and 35k lines because breaking past either will indicate strong sentiment in that particular direction.
Note that long term I'm still bullish but never, ever rule out the possibility of deeper corrections or drops. While I think this is only a mid-cycle correction and dump, with the possibility of a short term bear cycle in the larger bull market, always trade safely. If you can't bring yourself to set a daily rolling stoploss, then once every few days/weekly set a stoploss at the high price from the week before.
Details: Bitcoin is trending down in the final leg of a corrective five-wave pattern started in March. On a smaller timeframe it is painting a 2 week long series of corrections-turned-bull flag; and we are looking for Bitcoin to break above the resistance at the top of the channel but until it does expect it to continue down this flag.
Given that 38k is forming a short term floor in this range, the next drop down could bounce from there towards a potential bullish breakout from the bull flag. I don't envision a strong breakout in either direction and strongly suspect that no matter how it breaks, we'll see consolidation between one of two ranges. I provided a bearish and bullish scenario, each with a ~10% range of volatility to move within before it's next big move, probably not before June.
When will we leave the 30k-40k range? Bitcoin could consolidate here for anywhere from 1 week to several months. I say 1 week because historically the 4th week of the month, in this cycle, is when Bitcoin breaks bullish. I also say it could be longer because consolidating here is a very good buying opportunity that I don't expect MM to give up quickly. That said, there is a small possibility of an early bullish breakout over 50k this week, due to entering an aggressive correction a little earlier in May accelerating the monthly cycle and wiping some stagnation from the Bitcoin price actions.
What to watch for? First look for a breakout and confirmation from this bull flag. Once we break into one of the two ranges, look for the consolidation pattern to firm up before entering trades. Keep an eye on the 45k and 35k lines because breaking past either will indicate strong sentiment in that particular direction.
Note that long term I'm still bullish but never, ever rule out the possibility of deeper corrections or drops. While I think this is only a mid-cycle correction and dump, with the possibility of a short term bear cycle in the larger bull market, always trade safely. If you can't bring yourself to set a daily rolling stoploss, then once every few days/weekly set a stoploss at the high price from the week before.
Comment:
Comment:
I posted the -possible- worst case scenario here where we drop to the max depth supported by TA on a bearish breakdown