BITCOIN - The sky is clearing...is the bottom in?

BITSTAMP:BTCUSD   Bitcoin / Dollar
So far it turns out that the upper/ideal support zone of 590 - 600 noted in the previous update (https://www.tradingview.com/chart/BTCUSD/2uXftPuh-BITCOIN-Closer-to-resolution/) has held - on two attempts to break below it. This is great news for the immediately bullish count that I've been tracking, which is now my primary expectation, shown in the chart above.

Additionally, the market has been tracing out a pretty well-behaved standard set of patterns during this period, and it is most suggestive of having bottomed in wave (2) (in red), and is in the beginnings of a wave (3) higher.

And, while I still continue to track the immediately bearish case, the probabilities are now considerably more strongly in favor of the bullish case shown in the chart. In addition to the relative merits of the underlying wave counts for the bullish and bearish cases, there are two key MACD divergences that I'd like to point out. First, the 4hr chart with the kind of divergence that we would expect to see around major bottoming pivots , highlighted here:

Second, the same kind of divergence on the 1 hour chart, into the wave (2) low noted on the main chart above:

So, in the context of the question we've been trying to answer - whether the low of 8/2 was the bottom of our wave 4, before we return to the larger uptrend in a wave 5 - the weight of the evidence is increasingly suggesting that the answer is "yes".

What we have to watch for now...A break above 611 will seriously damage the immediately bearish case, further reducing its statistical likelihood. A break above 629 would all but eliminate it as a possibility. We can expect some resistance at both of those levels (the orange lines on the chart).

A break below 592 from here will again raise questions about the immediately bullish count, at which point we'd need to reassess (with support levels as noted in previous updates). However, this is not my current expectation.

Another key moment...as we give the market a chance to reveal what its preferred path upward will be.

Happy trading.
Comment: I thought it would be worthwhile to post some updates that I've been posting to the Bitcoin and Cryptocurrencies chats rooms, for folks who don't hang out in those rooms. The market has been following standard pattern expectations quite beautifully, as you can see from the following charts...


What's next?
My current expectation is that we'll find support in the area of 600 - 595, before rallying to test our first overhead support around 611...

Comment: Please read through the comments below for additional context before reading this post. I've been very busy lately and have been mistakenly posting in the comments section rather than as formal updates to this idea, so folks may not have been receiving the updates.

My apologies that the updates are now a bit out of order...I'll post a fresh idea soon to get things back on track.

I've been posting the following chart in the chat rooms over the last few days:


We have now topped at 640, and I'm expecting a drop to wave 2 support in the 600 area.

This is an extremely important moment in the context of the immediately bullish and bearish scenarios that I have been following. A defining moment for the market to indicate its immediate intentions.

If support for purple wave (2) holds on this drop, the evidence very strongly suggests that we will commence a long term rally from that support level. This would be an excellent, high probability, low risk, high reward place to enter the market or add to existing long term positions.

Additionally, this will be wave 3 of 3 - the heart of a 3rd wave - the typically strongest part of an Elliott Wave impulsive pattern.

If, however, we drop much below the blue box, it will be strongly suggestive that the market will be heading to the mid- 400's before an uptrend can resume.

The pattern can allow as low as 585 before concern is warranted, however, it is my current expectation that the blue box (or perhaps slightly above it) will hold.

I consider this a potential generational opportunity.

Happy trading.
Comment: I should also note that the 640 top that we hit recently was right in line with the 637 - 650 resistance area noted in previous updates...the market continues to follow through precisely in line with the expectations that the pattern has suggested...
Comment: Just a quick update, which is largely unchanged from the previous update...

So far, things are going as expected. As you can see in the chart below, the market has so far has extended green wave v to reach a temporary top at 642, roughly in the middle of the expected topping range of 637 - 650.

Although it's possible to extend a bit higher toward the top of that range, that is not my current expectation. I expect that we are now beginning the decline to the blue support area noted on the chart.

What to watch for:

If we extend deeper through the bottom of the blue box toward the 585 area, it will raise some question about the immediately bullish scenario. Much below 585 will begin to increase the likelihood that the immediately bearish scenario that I've discussed in previous posts is the active pattern - pointing to levels under 500 before an uptrend can resume.

This is not my current expectation - I currently expect that the blue box will hold as support.

If we complete the upcoming decline in a valid 3 wave Elliott structure, followed by a properly structured upturn, without dropping as deeply as the blue box, it would be a quite bullish sign indeed. This would be strongly suggestive that the low of 2-Aug was in fact a long term bottom, and the long term uptrend had resumed, with much higher levels to come.

Happy trading!
Comment: The chart to accompany the previous commentary. I should also mention that I have slightly raised the target range for support to 598 - 608...

PLEASE NOTE: I've adjusted the wave labeling in the most recent wave counts from what is shown in the original posted idea. Forecast is the same, but the most recent chart represents the most up to date labeling.
We really couldn't ask for more...the market has been following the pattern in an almost textbook manner. This is what looks like is coming next:

...however, some of the internals/technicals are starting to get to extreme levels, so crazy things to the upside can happen from here...but I'm not seeing the the volume yet to support a sustained move, and I tend to doubt that we would see a moon shot this late in a wave 5 of 1...wave (3) after wave (2) might be a different story though...follow the pattern...
Sorry, the link I posted in my previous comment was to the wrong chat room posting, here's the correct one: https://www.tradingview.com/chat/m/55cf57a1082542038f1e0005abbbbfdb/
If you've been following along, you might have noticed that the market has been conforming perfectly within the expectations of the pattern that I've been tracking. The support and resistance levels pointed out in my most recent posts have provided an excellent roadmap for the path to higher levels - most recently with 605 - 610 serving as resistance for the (blue) wave 5 top (the market stopped at 608.37), and 595 - 600 serving as wave 2 support under the current rally (the market stopped at 600.02).

As I posted in the bitcoin room a few days ago (https://www.tradingview.com/chat/m/11c6fe1df5624f62a8c379fb32754d65/), my current expectation is that we now have a clear path to the 630 region, with significant resistance/confluence at 637. Once the current 5 wave move completes - shown in green on the chart below - I'm expecting a meaningful pullback.

The structure of that pullback will be a critical and likely deciding factor as to the question of whether we are now well on our way to much higher levels, however, the nature of recent market action has further tilted the probabilities in favor of the bullish case that I've been tracking. Stay tuned...

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