Like I wrote about in my previous BTC report, lower highs often lead to lower lows. In terms of simple resistance levels, 6020 followed by 5870 are lower highs.The consolidation between 5690 and the 5870 level (which happens to be the lower boundary of the .618 of the initial structure) was the confirmation point for continued momentum. A break below this zone further confirms the C Wave of 4 is in play.
In terms of , I wrote about how the market needs to choose between the two scenarios. The first is the C Wave, and the second is the higher low between 5600 and 5500 which would then be a Wave 2 low. At the moment I am leaning more on the C Wave because of the lower highs that are in place. Until price action returns and proves itself (as in forming a higher low in the 5500 area), I will just listen to what the market is saying now.
If this is truly the C Wave, then within the wave, the break of the 5690 support is be the beginning of Wave 3 which can complete around the 5530 area (1.0 extension of initial wave) before there is a bounce attempt. After a minor retrace, the Wave 5 of this formation can take prices as low as the 5330 area ( of initial wave).
For people who wonder why I do not short even though I am writing about scenarios. The answer is I only play one side of these markets and do not use margin. Shorting these coins, especially this one, requires a ton of attention, because things change so fast. If I want to get involved in swing trade shorts, I would rather do it in the forex markets.
In summary, this market appears to be following the path of the C Wave of 4 that I wrote about previously. If it continues without any curve ball surprises, then the 5330 level is a likely target. There is plenty of opportunity to short this market on the smaller time frames if that is within your trading plan. My plan is to wait for this Wave 4 correction to complete and get long in anticipation of Wave 5. Either way, as you know, anything can happen in this market and being flexible will serve you well. Price action often signals changes before anything else.
Comments and questions welcome.