I see 2 possible scenarios, bounce off around 30k or bounce off of 20k.
It is important to point out the current estimated leverage ratio which is of 0.211 as of this moment.
https://cryptoquant.com/asset/btc/chart/market-indicator/estimated-leverage-ratio?exchange=all_exchange&window=DAY&sma=0&ema=0&priceScale=linear&metricScale=linear&chartStyle=line
Leverage is at an all time high and has been going up during the downtrend.
20k bounce
The 30k bounce seems unlikely at this time as we have yet seen a major spike in volume. No real volume has yet happened in this downtrend since the 4th of January 2021. We have typically seen 40% moves to the downside during weekly volume selloff spikes in which case the 30k level would not hold. The spike in volume would bring us to the 20k levels completing the retracement to the 200SMA where we saw BTC holding in 2015,2018 and 2020. Previously the RSI found its bottom after 392 and 350 days of downtrend, which seems to be in line with how many days are left before we are finally oversold on the weekly RSI. We have been in 280 days of down trend ( or ranging) leaving only a few months left to find a bottom (approx. 80 days)
≈30k bounce
A ≈30k bounce would imply that the incoming liquidation event would be a short squeeze and that the selloff already happened during the 17th of May. For the ≈30k bounce we would need the traditional markets to find a bottom very soon which could of happened today as the NDQ and SPX went below 30 RSI on the daily but the macroeconomic conditions would on the other hand favor an RSI below 30 on the weekly before we see a bounce. Bouncing perfectly off 30k is unlikely since we didn't get a perfect double top to then form a regular flat correction. 33k or 27k would be the targets to form either an expanded flat or running flat correction according to the Elliot waves. Either way 27k seems more likely as the weekly RSI still has room to the downside and we are still waiting on major volume to come in.
The TPs for the 30k bottom are taken from the fib levels taking 64k as the top and the September lows as bottom since the 69k ATH wasn't supported by a higher high on the RSI we could assume the real TP from the September lows has yet to be seen.
TP1=148k
TP2=207k
The TPs for a 20k bottom are taken from the fib levels taking again the 64k top and in this case a 20k bottom.
TP3=134k
TP4=248k
If we get to oversold levels on the weekly RSI, BTC could leave the range in about 703 days using the last 2 cycles as references. (average of 623 days remaining in range after bottom is found on weekly RSI) It would only be then that the TPs come into play.
It is important to point out the current estimated leverage ratio which is of 0.211 as of this moment.
https://cryptoquant.com/asset/btc/chart/market-indicator/estimated-leverage-ratio?exchange=all_exchange&window=DAY&sma=0&ema=0&priceScale=linear&metricScale=linear&chartStyle=line
Leverage is at an all time high and has been going up during the downtrend.
20k bounce
The 30k bounce seems unlikely at this time as we have yet seen a major spike in volume. No real volume has yet happened in this downtrend since the 4th of January 2021. We have typically seen 40% moves to the downside during weekly volume selloff spikes in which case the 30k level would not hold. The spike in volume would bring us to the 20k levels completing the retracement to the 200SMA where we saw BTC holding in 2015,2018 and 2020. Previously the RSI found its bottom after 392 and 350 days of downtrend, which seems to be in line with how many days are left before we are finally oversold on the weekly RSI. We have been in 280 days of down trend ( or ranging) leaving only a few months left to find a bottom (approx. 80 days)
≈30k bounce
A ≈30k bounce would imply that the incoming liquidation event would be a short squeeze and that the selloff already happened during the 17th of May. For the ≈30k bounce we would need the traditional markets to find a bottom very soon which could of happened today as the NDQ and SPX went below 30 RSI on the daily but the macroeconomic conditions would on the other hand favor an RSI below 30 on the weekly before we see a bounce. Bouncing perfectly off 30k is unlikely since we didn't get a perfect double top to then form a regular flat correction. 33k or 27k would be the targets to form either an expanded flat or running flat correction according to the Elliot waves. Either way 27k seems more likely as the weekly RSI still has room to the downside and we are still waiting on major volume to come in.
The TPs for the 30k bottom are taken from the fib levels taking 64k as the top and the September lows as bottom since the 69k ATH wasn't supported by a higher high on the RSI we could assume the real TP from the September lows has yet to be seen.
TP1=148k
TP2=207k
The TPs for a 20k bottom are taken from the fib levels taking again the 64k top and in this case a 20k bottom.
TP3=134k
TP4=248k
If we get to oversold levels on the weekly RSI, BTC could leave the range in about 703 days using the last 2 cycles as references. (average of 623 days remaining in range after bottom is found on weekly RSI) It would only be then that the TPs come into play.
Comment:
Written on 1/24/2022 but published in private (explains the NDQ and SPX bottoms not matching with the date)