Bitcoin has surprised us with an strong impulse to the upside, so that we can adjust our wave count accordingly.
Where are we now?
Most traders will happily buy into the pump, but we have some warning signals:
+ There is no in the beginning of the impulse, only at the end. This suggests fomo-buying by weak hands and not substantial reversal-buying by a majority of market participants.
+ C-waves are often mistaken for new impulse waves - the subsequent reversal takes everyone by surprise. In our case this would be wave (c) of B.
Where do we go from here?
Until we have other evidence we can assume that we are in this final wave (c) of a larger B. That means the larger wave C to the downside is about to start soon, and this is what we try to catch.
How to trade it?
According to the rules we have to assume that wave (c) is equal to (a), or - in a very case - 1.236 or of (a). These are the red boxes, which are our potential reversal levels. Ideally the price will stay inside the channel, or the channel line will become resistance and provide one more point of confluence.
What if not?
Should price leave the channel, the idea is invalidated and we should look for long setups.