BITSTAMP:BTCUSD Bitcoin / Dollar
I don't trade this, but I thought it looked interesting. Price on its way to finishing up its 5th wave. Drove up to the 61.8% FIB, and dropped immediately on the touch. We should see a move down to the 38.2% to complete the mini 4th wave.
Comment: Price rejected heavily off of the level..
Comment: Reversal pattern with pin bar as the signal. Great time to add to the long to hold for long term.
Comment: next few weeks will be good for BTCUSD as DXY begins its down trek
Comment: price dipped below this horizontal ray to retrace to the major level, then slowly crept back up. higher lows formed, and then we saw price starting to respect the level once again. I would look to buy either at the horizontal trendline or prior to the break to capture as many pips as possible. Not waiting for a break and retest because I'm biased for this to be bullish, so getting in before the move.
Comment: getting there
Comment: watch for the break of the 38.2% FIB level to make the next move higher.
I kind of just do what makes sense to me in terms of the 5th target, and I try to make it conservative. But usually my process goes, I start the fib from the bottom of wave 1, and then project the top so that when the retracements show up, the 61.8% lines up with the top of wave 1, or bottom of wave 4. In this case, if I did that, then the 0% would be under wave 3, so that doesn't work for me considering I'm looking for a wave 5 to be higher than wave 3. So, I lined it up with the 78.6% because the fib levels seem to line up nicely with other PA structure. I don't leave it strictly to fibs. I try to use it in relation to context. So, if I had to trade this, I would target the 23.6% as a first target because there might be some strong resistance there. Then I would target the 0% of the fib, but that area looks like it could either blow right past, or hit it and then drop, so I'd watch PA closely at that point. If PA looks like it can go higher, then I would target that -23.6%, which seems to be an area of confluence. I created the channel using the bottom trendline as a basis for the angle, and applied it so that the top of wave 3 was the first touch point. I'm not sure if this is conventional elliot wave theory, but it's just a little bit of everything that I use to make an educated forecast.
To go a little deeper into your question, that 23.6% level on this updated chart could actually be the top of the mini 5th wave. If it is, then we can expect a correction bringing prices back down, maybe into the 38.2% or the 50%. This might bring opportunities to go back long to complete the higher tf 5th wave.