BTCUSD Perspective And Levels: How Low Can It Go?

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
BTCUSD update: 7030 is touched as price attempts to retrace after the relentless rally. The big question: Is this the beginning of the big correction that everyone has been waiting for? Or just another shallow retrace? I will refer to Elliott Wave in order to get an idea of what is reasonable to expect.

After the consolidation breakout which eventually got labeled as a Wave 4, the count for the 5th wave is pretty clear. The current retrace puts us in 4 of 5 which implies there is a chance that we get one more attempt at new highs before the BIG correction. We are now 10 days away from the fork, which makes for plenty of time for a retrace, a reversal and one more push toward 8k.

As I wrote about in my previous report, there are extension overlaps in the 7900 to 8k area which makes it a convenient potential peak. So if I were shorting (to be clear I am not), I would not be too aggressive with target expectations on this leg. 6840 is the nearest support which happens to be the .382 of the recent bullish swing measured from the 5632 low. That level may offer a swing trade opportunity long if a smaller time frame reversal pattern can appear there.

If that initial support breaks, the next support is the 6640 level, which is the .382 area of the bullish structure measured from the 5114 low ( previous Wave 4 low). IF price actually retests any one of these supports, and a bullish reversal formation shows up on a smaller time frame like the 1 hour, these would present attractive reward/risk opportunities. The key to this is the bullish reversal formation (like a double bottom ) which provides a reference point to measure risk from. Without that, we are just bottom fishing.

The mistake you want to avoid is jumping in too early. This is an easy mistake to make without any point of reference or too much focus on smaller time frames while attempting to swing trade. For me, the entry process begins with the level, and if price is not at a level that I have defined previously, then I have no reason to do anything else. Once it reaches a level then I move on to the next step which is to evaluate the chart patterns.

What if price never makes it to a level and reverses sooner? That can happen, and that is not a trade that I will participate in. I am looking for opportunities that fit within my criteria for my swing trading plan. This keeps my decision making simple and helps to minimize any emotional tendencies like forcing trades because I am afraid to miss the next move up.

How do we know this is not the big correction? I am anticipating that it is not because of the fork in 10 days. I believe many of the investors who missed out will see this as an opportunity to get on board the money train before it goes to 10k (which is what all the hype is telling them). That may be enough to get this market to retest the high which will complete Wave 5 of 5. After that, any correction like this and I will be expecting much lower levels. Anything can happen and I could be wrong, but that is what I am going by until the market proves otherwise,

In summary, the current retrace is perfectly normal and still very shallow at the moment (relative to this market). This exact price action is why I do not buy at 7500 even though this market still has a chance to run to 8k. I am willing to take a long swing trade at the 6840 level or 6640 level if price action cooperates (and risk can be clearly defined) and hold it only for an attempt of retesting the high. Wave 4's are typically the easiest wave to forecast because 3 waves have to be in place which is the scenario at the moment. Since swing trading means a trade can go on for days, it is a tougher strategy to employ in this market because of how quickly things change. So for now I will wait to see if the market can reach my predefined levels and then evaluate the chart patterns from there. Be patient and be flexible.

Comments and questions welcome.
Marc Principato, CMT |Author: Analyze Any Financial Market Like The Pros Using Price Action| | Cofounder (S.C.)

H&S completed there won’t be any more big corrections unless something the size of the China fud happens again , the price will fluctuate around $500-$1000 at the most , there would have to be a shit ton of sellers at the same time to drop it 2k and that won’t be happening unless something the size of China puts fear in again if it drops $500 the buy wall will eat it up
First big time ATH was 33$. Next 266$ - 8x. Next 1300 something, 1333 gives 5x. Now if we had 8000 it will be 6x. Maybe...
I'm thinking to myself that whales priority is to protect money. This Segwit2x can go really wrong if price crashes to hard at the same time. No mining support, bad price - looks dangerous.
But BTC is chicken that brings golden eggs, they probably dont want to kill it. So they should have start selling Bitcoin already some time ago to be as gentle as possible.
+3 Reply
Such a detailed explanation... Even an inexperienced person can easily get it. Thanks a ton!!
+1 Reply
Quality post as always Marc - thanks for sharing your analysis with us all!
I am seeing the same here. I found what seems to be an ending diagonal that broke down.
Actually, it's not .5 fib it's .382. But last time before we hit 5000, it went down to touch 4h 100 MA and lower than .382. So I think it might do the same, will be around 6200-6400 area...what do you think about it? Thank you.
it will .5 fib retracement and meet up trendline where your box is. I think it looks more valid in logic. then we shoot for 8000.
Thank you for your analysis.
With SegWit2x futures at over $1300 a piece, it's still worth it to hold BTC through the fork -
Hey Marc, During the day Yesterday we had a correction to 7112 (wave 3) - we have hit that again just now on the 1 hour - are double bottoms like that across Waves counted or each wave stands on its own merits ? Just learning about EWs now

Home Stock Screener Forex Screener Crypto Screener Economic Calendar How It Works Chart Features Pricing House Rules Moderators Website & Broker Solutions Widgets Charting Solutions Help Center Feature Request Blog & News FAQ Wiki Twitter
Profile Profile Settings Account and Billing TradingView Coins My Support Tickets Help Center Ideas Published Followers Following Private Messages Chat Sign Out