After declining 30% from the high of 24-JUL to the low 14-AUG, the Bitcoin market has now rallied approx 25% into the 31-AUG CME futures last trade date.
Typically, the rally ought retrace a Fibonacci 50% to 61.8% of the previous downtrend (i.e. from 24-JUL to 14-AUG), with possible approx upside targets as follows:
@7200: Fibonacci 50% retrace of 24-JUL to 14-AUG downtrend. —High probability @7500: Fibonacci 61.8% retrace of 24-JUL to 14-AUG downtrend. —Medium probability @7600: Fibonacci 61.8% retrace of entire Bitcoin market. —Medium probability @8000: Fibonacci 78.6 retrace of 24-JUL to 14-AUG downtrend. —Low probability
With overbought price/RSI negative divergences on the 4-hr timeframe, and with the first of the aforementioned Fibonacci targets reached; barring any wave extensions, it is quite possible that the bounce is complete:
As per the aforementioned Fibonacci targets, at 7500/7600 marks a strong confluence of Fibonacci resistance zones. At present juncture, taking out 6880 ought to signal weakening momentum, and the start of a trend reversal.
Once the current bounce completes, the next sell-off leg ought to mirror the first, i.e. a 30% drop towards 5200 approx (5178 BITFINEX) by possibly mid-September, coinciding with the CBOT XBT futures expiration on 19-SEP.
Models are speculative Elliott Wave guesswork indicative of price/structure; the projections may occur sooner or later than anticipated.