1) BTC's bull run remains intact, in my view.
2) Elon Musk's tweet was interestingly timed, but does not explain BTC's drop in the last 24hrs. Technicals come first. News provides narratives to explain what has already happened and is inexorable on the price chart.
3) I see BTC as completing a seven-wave structure to its parabolic peak. I continue to hold this macro model as valid, until price action proves otherwise. Factors that could invalidate this model include a dramatic wider stock market crash. Keeping an eye on the S&P and the DXY charts is advisable.
4) The correction that started 14 April is Wave 6 down in this macro structure. Wave 6 should be deeper — in percentage terms — than Wave 2 and Wave 4.
5) That the correction that started 14 April (Wave 6) didn't significantly exceed — in percentage terms — the correction that started 21 February (Wave 2) has given me pause as BTC has ranged for the last month. BTC cleared the 0.702 Fibonacci level on the retrace, but didn't clear the 0.786, which would have been a definitive signal that the correction was over. Nonetheless, that BTC reached the 0.702 should, probably, be seen as a sign of strength.
6) So it now appears obvious that we're seeing an ABC movement. The question is, where will be the base? BTC appears to be repeating the same crash structure that started the April correction. (This fractal is marked with a box on the left.) If we simply copy that fractal, this gives a possible downside target of 43.3 to 41.9k. Further, if we place a Fibonacci and align yesterday's wick down with the 0.786, which marked the way to find the base of the A Wave of 14-25 April, we get confluence on the 43.3k zone.
7) In the short term, we can expect BTC to reach up to the 51.5-53.0k price range, corresponding with the 0.382 to 0.5 local Fibonacci. That is, if the 14-25 April fractal is repeating. From this local peak we can expect, or at least prepare for, a range followed by a drop and possible double-tap on the 43.3-41.9k zone. This will likely take a week to play out.
8) The question at that point will be whether BTC has found the bottom of its present macro correction. My view, so far, would be that it had. But the breach of the weekly 21 EMA is concerning in this regard. In previous bull runs, BTC has tapped that EMA, but ultimately found support from that EMA. Dropping now to 43.3k would put BTC below the weekly 21 EMA, which generally BTC has done only after its cycle peak.
9) Despite great performance on the part of some alts recently, I don't think we've yet seen the full-blown rotation that alt season would suggest. So while it cannot entirely be discounted that the recent 0.702 retracement BTC printed on the 14-25 April A Wave correction is in fact the retracement rally of a cycle top, I lean towards the April-May correction simply being the last major correction before the seventh wave to the cycle top, at around 80k.
10) The real question, for me, is whether there will be enough buyers at 43k to push BTC strongly into its seventh wave. I also wonder what news will emerge to explain that upward momentum, if it happens. The bearish scenario is a further climb down from 43k after a period of ranging between 46 and 54. If this happened, we'd be back to square one and really have to look at everything again. What is happening currently with the S&P is likely to have a bearing. Everyone is aware that the market is in a bubble, and that MMT is laying down the perfect conditions for a wider market crash. Will BTC peak before this happens, or will BTC's bull run be a victim of this wider economic dynamic, the reasons for which is a matter for speculation, but could include a purposive economic meltdown on a global scale.
Feel free to comment.
2) Elon Musk's tweet was interestingly timed, but does not explain BTC's drop in the last 24hrs. Technicals come first. News provides narratives to explain what has already happened and is inexorable on the price chart.
3) I see BTC as completing a seven-wave structure to its parabolic peak. I continue to hold this macro model as valid, until price action proves otherwise. Factors that could invalidate this model include a dramatic wider stock market crash. Keeping an eye on the S&P and the DXY charts is advisable.
4) The correction that started 14 April is Wave 6 down in this macro structure. Wave 6 should be deeper — in percentage terms — than Wave 2 and Wave 4.
5) That the correction that started 14 April (Wave 6) didn't significantly exceed — in percentage terms — the correction that started 21 February (Wave 2) has given me pause as BTC has ranged for the last month. BTC cleared the 0.702 Fibonacci level on the retrace, but didn't clear the 0.786, which would have been a definitive signal that the correction was over. Nonetheless, that BTC reached the 0.702 should, probably, be seen as a sign of strength.
6) So it now appears obvious that we're seeing an ABC movement. The question is, where will be the base? BTC appears to be repeating the same crash structure that started the April correction. (This fractal is marked with a box on the left.) If we simply copy that fractal, this gives a possible downside target of 43.3 to 41.9k. Further, if we place a Fibonacci and align yesterday's wick down with the 0.786, which marked the way to find the base of the A Wave of 14-25 April, we get confluence on the 43.3k zone.
7) In the short term, we can expect BTC to reach up to the 51.5-53.0k price range, corresponding with the 0.382 to 0.5 local Fibonacci. That is, if the 14-25 April fractal is repeating. From this local peak we can expect, or at least prepare for, a range followed by a drop and possible double-tap on the 43.3-41.9k zone. This will likely take a week to play out.
8) The question at that point will be whether BTC has found the bottom of its present macro correction. My view, so far, would be that it had. But the breach of the weekly 21 EMA is concerning in this regard. In previous bull runs, BTC has tapped that EMA, but ultimately found support from that EMA. Dropping now to 43.3k would put BTC below the weekly 21 EMA, which generally BTC has done only after its cycle peak.
9) Despite great performance on the part of some alts recently, I don't think we've yet seen the full-blown rotation that alt season would suggest. So while it cannot entirely be discounted that the recent 0.702 retracement BTC printed on the 14-25 April A Wave correction is in fact the retracement rally of a cycle top, I lean towards the April-May correction simply being the last major correction before the seventh wave to the cycle top, at around 80k.
10) The real question, for me, is whether there will be enough buyers at 43k to push BTC strongly into its seventh wave. I also wonder what news will emerge to explain that upward momentum, if it happens. The bearish scenario is a further climb down from 43k after a period of ranging between 46 and 54. If this happened, we'd be back to square one and really have to look at everything again. What is happening currently with the S&P is likely to have a bearing. Everyone is aware that the market is in a bubble, and that MMT is laying down the perfect conditions for a wider market crash. Will BTC peak before this happens, or will BTC's bull run be a victim of this wider economic dynamic, the reasons for which is a matter for speculation, but could include a purposive economic meltdown on a global scale.
Feel free to comment.
Comment:
13 May 2021 19:31:25: Seems that this move is happening faster than the April fractal. The 34 weekly EMA, which would be the next major EMA down if the 21 is broken and not just tapped currently sits at 35k. On the other hand, if the double-tap comes so swiftly, we might see several taps on the 21 weekly EMA, establishing a base at around 46.5
Comment:
14 May 2021 20:33:17: First test incoming to see if the fractal is repeating. Looking for an imminent drop to 48.5.
Comment:
15 May 2021 09:52:37: 43-41k is a large range, so I wanted to look at this again and see if I could narrow it down and find confluences that might better hone in on one final base level for this C Wave down. Obviously, this is still guess work. What I did was to examine the chart using Bollinger Bands, the Ichimoku cloud, various EMAs, SMAs, Fibonacci extensions and levels, and demand and support zones on multiple timeframes, from the monthly through the 10-day, 9-day, 7-day, 4-day, etc. In grey on the price axis are the range of possibilities, but in white is the one that for me, currently, has the most confluence, coming in at $41,500. It continues to appear that this is happening faster than originally projected. I will try to do a wave count on the lowest timeframes.
Comment:
15 May 2021 10:33:00: Scratch that on the timeline. It may actually be taking slightly longer. Possible final low coming in 21 May, or this next Friday, with the next major drop coming in on Tuesday, or 18 May. That is, if the fractal of late April is repeating.
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