Colleagues. So, I doubt there are many people left who would say BTC is not in a correction after tapping out at 9.99k. Bitcoin has broken the ascending channel from 6.5k and this confirms, it is correcting. This simplifies things a little.
On the grand scale ... look at the daily chart, and refer to my previous ideas. Red Line you see on this chart assumes BTC is in a big triangle wave, and this is the start of Wave E. Wave E could take BTC down to around the 6.9k mark with a possible extension below that.
Blue Line you see on this chart assumes BTC has completed a running flat ABC correction to 6.5k and is now in a nice impulse up. 6.5k to 9.99k would be wave 1, and it is now forming wave 2. If that's the case ... I can't wait for wave 3, the bulls will have fun with that one!
Now on the smaller time frame ... look at the purple waves. Bitcoin has gone through a 5 wave impulse down from 9.99k to 8.98k, almost precisely 1000 points (and also note wave 1, 3 and 5 are each about 500 points! Almost looks like this was planned ... lol). BTC has now started a correction ... likely an ABC. BTC is busy with the first wave. Where will BTC take us? ... I don't know for sure but I'd say 9400 to 9600 is a good target range right now. After that, Bitcoin would likely need to correct again ... this is where it gets questionable.
Here's the crux ... it looks like the waves are lining up to form a right shoulder of a much bigger H&S. It could also complete on wave 3 of an impulse down, and wave 3's are normally fairly aggressive. That could provide the strength to take us down, with wave 5 completing somewhere in the 8000 - 8500 territory. Will the H&S complete?
Now here's the really good news ... if it does, it certainly would make for a healthy correction on the daily chart. The current 1000 point chart is but a spec on the daily ... it isn't good enough in my opinion. Going to 8000 to 8500 territory would satisfy a lot of buyers. Then BTC could start that grand WAVE 3 (see blue line) up ... that I think has the potential to end the bear cycle!
I keep my options open. Three possibilities right now:
(1) Bitcoin follows the blue line after a bounce from the 8k to 8.5k territory and we start a nice wave 3 impulse ... this is the one that seems to fit best with the projected EW waves I have shown. (2) We return full bear and hit the bottom of the triangle at 6.9k. That would mean BTC needs a nasty impulse down after this ABC completes, that would blow right through 8k. (3) We go up from here .... 8.98k was the low ... I'm not putting much into this strategy.
Right now I'm long on ETH, and will likely sell once this ABC correction is over. If it does continue to go up (option 3), I can easily buy in and not miss much. If option 1 or 2 happen, I'll be happy I sold. I have to be open to all these scenarios!
Remember, only a fool relies on one potential outcome!
Please do not use this information for investment decisions. For educational purposes only.
But.....what if your waves 3-4-5-A-B-C form an IHS?
MAGICMARK
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@BethanyJoy, Good question ... that's option (3) ... if we don't complete the H&S, we end up with an IHS!!! And that is what triggers option 3 above ... as in 8.98k was the low!
tviewcrau
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Do you actually trade like this?
MAGICMARK
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@tviewcrau, I swing trade, so yes ... it's important for me to understand key levels and the big picture in terms of direction. I'll wait days to make moves. Last move made 41% profit. So it works.
xuanhaimmoer
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MAGICMARK
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@xuanhaimmoer, yes possible, but we have to keep our mind opens to all options. This can also be a temporary correction wave of an impulse UP. It can also go down and stop at the rising trend line from 6k, and 6.5k, as this has been great support so far. The target for that is 6.9k. If you don't keep all these options open and just wait to go all in at 4.5k ... what happens if it doesn't go there and we have a nice bounce up?? We miss tonnes of profit opportunity. The best is to decide at each support level what to do.
xuanhaimmoer
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@MAGICMARK, I think we need put our money from 6k5 - 4k8 and we should not miss the oppotunity
MAGICMARK
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@xuanhaimmoer, see this idea, it has a bullish scenario and a bearish scenario. There is a possibility we are in a major impulse wave up, but correcting in WAVE 2. It seems like doom and gloom and feels very bearish, which is normal ... but we shouldn't just assume this possibility doesn't exist. This possibility has WAVE 2 ending around 8000 - 8500 and then a huge impulse wave 3 up! Don't get me wrong, I also have the bearish possibility, which means we will target at least the bottom of the triangle at around 6.8k or so.