As always, this idea is for educational purposes only and should not be taken as financial advice. NEVER trade solely based on someone else's opinion. Use these ideas to validate your own!
On the chart here we can see a 5 wave impulse followed by a sharp drop which I believe to be a Wave 2 retracement of our first impulse up. Note this wave count assumes the correction from 20k ENDED at the 6k lows we reached and that this is the start of a fresh bull cycle with 5 large impulse waves (that will take us to new ATH's). Currently, I believe we are at the peak of our B wave in this simple correction. Note that the pink is coming from our ATH and second highest peak, so it is a very strong that we are testing at the moment. The first red horizontal line is our conservative target which would give our Wave C (of the down) a length equal to 61.8% of Wave A. The second target gives our Wave C a length equivalent to 100% of Wave A. NOTE the third target IS NOT POSSIBLE WITH THIS WAVE COUNT, but I have placed it there because if we do go below the last low of around 6k, it means the correction from 20k has not ended and the 3k level target comes into play.
As always, feel free to ask questions in the comments and give this idea a LIKE if you think it was useful!
1. Volume is lacking for a reversal
2. 4 Hour RSI is showing a bearish rising wedge pattern
3. Wave B of my Wave count was not a ZigZag as I initially thought but is instead a regular "FLAT" corrective pattern. This keeps the wave count intact.
Also, targets have been adjusted slightly to account for the new end to Wave B.
Detailed explanation coming in the morning!
And it looks like my initial idea of a drop was accurate, it just happened a couple of hours after I had expected it to. Updated targets will be posted shortly, but ultimately I believe we are headed to 6k levels or lower, as stated in the title of this idea.
1. Current push up should end before $8900.
2. We should then be headed to $7200-$7600 where we should see a strong bounce.
3. If a reversal is not confirmed at this point we should then be headed back down to test the 6k levels.
4. At this point, if we lose 6k, we may correct to 3k-5k levels. If 6k holds, it will be the end of the correction, and up we go.
I know it is hard to imagine this scenario playing out without me demonstrating on the charts, so I will try and see if I can get the time to draw up something quick so you can see visually how this may play out.