Will Past Resistance Become Future Support?

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
This idea is based on some historical analysis of previous top patterns in addition to some Elliott Wave analysis.

One of the things to note is that every major high and subsequent deep correction that has occurred since the 2017 high has exhibited 1) a high, 2) a rapid drop or dragonfly candle that quickly gets bought up, and 3) a subsequent lower high. Only on one occasion was the subsequent high slightly higher than the first high.

These highs + lower highs, split by rapid drops or dragonfly candles are circled in blue.

So it appears, historically speaking, that these types of patterns are good predictors of top formations and subsequent deep corrections.

Further, the Elliott Wave analysis shows a structure that is already quite extended in the 5th wave, also suggesting a correction is due. And assuming the bear market is over, and the low is in, this entire EW structure could represent a broader wave 1 which usually correct quite deeply, to fib. 0.618 or more.

One of the reasons that I think we may correct deeper than fib. 0.618 is that there have been no tests of the area between previous strong resistance (the top of subwave 1 of the Elliott Wave structure around $4.4k) and the $8.4k region high. And one of the rules of TA in healthy markets is that previous resistance becomes subsequent support. That hasn’t happened yet. The $4.4k region was an area of strong resistance which we have yet to test and transform into a strong support, upon which to base a subsequent healthy bull trend.

There are also a couple of trend lines . The lower one in thicker green is the trend line for the $3.2k low and the subsequent $3.4k higher low. The second trend line in lighter green uses just the $3.4k low and the last low before the start of the parabolic price movement in the $4k region. The target price area lies between these two trend lines .

The ABC correction depicted has two targets. The first is the end of the A leg in the mid $5k’s. This is likely to get bought up quickly resulting in a bull trap B leg which is common of ABC corrections retracing to fib. 0.5 or 0.618 of the A leg. Followed by the C leg of the ABC correction down to the mid $4k’s or lower.

Final Target: $4k-$5k

This image shows the parabolic price rise after the end of the last bear market in 2015. As you can see, after the parabolic price surge, the price deeply corrected before continuing higher, and previous resistance became subsequent support.
Comment: We may possibly inch up a little further into the 9k's, but regardless, a deep correction is imminent, courtesy of @hithrowaway: https://twitter.com/hithrowaway/status/1...
Comment: For the Twitter handicapped: This is only the 5th time in $BTC history in which @coinmetrics Pro's NVTS has hit 100.

The previous 4 instances were followed by 82%, 70%, 78%, and 83% corrections, respectively.
Comment: Courtesy of @iamCryptoWolf:

Headlines broken ass trolls want you to buy:
- Could Bitcoin Reach $100,000 in 2020?
- Fidelity Is Really In Love With Bitcoin
- Crypto Market Remains Strong
- CME Futures Gaps Hint Bitcoin Price is Headed to $18,000 Or Higher.
Stay Safe, stay Wolf.

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