dk.dusankovacic
Short

The Analysis you might want to check out!(educational, detailed)

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
Hello Everyone,

Welcome to my update on BTC technical analysis . As originally anticipated, we formed a confluence of indicators across the board signalizing a short reversal. However, i have to admit, that the confluence was reached at lower level then originally assumed (6500, instead of 7200). Next time, i will analyze the impact of the price action on technical indicators more in details. So, let's have a look at what is going next.

At first, the technical indicators:
  • RSI has nicely bounced from the support marked by the green line. If it can manage to break through the red resistance line, this is a good signal for at least short uptrend.
  • MACD is about to form a bullish crossover on the big triangle support level . If MACD histogram gains increasing momentum on the positive side, this is also a good sign of at least short uptrend.
  • Stoch RSI is heading to bullish territory. If it can manage to get through 80, good sign for uptrend.

The second comes the price action:
  • Last Elliot Waves mini-cycle performed exact 1:1 extension of wave 3 into wave 5. Looking at the larger retracement ABC cycle (in cyan), we can reasonably expect 1:1 extension to form resulting at reaching low at cca. 4800 level. There could be also a scenario in play, where current low is the truncated C wave of the cyan ABC correction, however this seems unlikely due to relatively low volume (high volume is very characteristic for trend reversal).

Conclusion
If the price breaks above previous high (7270), we can expect a short term uptrend in from of retracement of the last Elliot wave cycle to the logarithmic resistance line at 0.5 Fibonacci level (7800). This movement will also form a confluence across all mentioned technical indicators and according to my perspective, it is the likely scenario. Retracement to that level will most likely follow by sub-wave 3 of the cyan C wave. Considering that generally, wave 3 is often the longest and never the shortest, we can expect it to touch the actual bottom at around 4800 level with wave 5 forming a double bottom at the same level. This movement will result in formation of 1:1 extension of the large cyan ABC correction and probably trigger a reversal. Panic selling and short positions entries are typical sign for wave 3 (therefor the longest).

Trading
As for now, i am waiting for the strong logarithmic regression down trend to be broken with formation of higher high above 7270 level. If this happens, the confluence of indicators will signalize entry in a long position with target at 7800 and stop loss at 7000 level resulting to a trade with reasonable risk to reward ratio. After reaching the target, i will enter a short margin position with targets at 6000 and 5000 levels.

Please DYOR, i might be very likely wrong. Trade on your own risk, i am not responsible.

If you see an error in my analysis or have a different opinion, feel free to open a discussion
I was thinking the elliot wave was more like this: http://prntscr.com/j1ypek -- Thoughts ?
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