There are several possible wave counts that could now be in play. The two I have shown on the chart are:
- Grey : Completed wave Primary Wave v on 5 March
- Blue : Completed Primary Wave 5 on 20 Feb and have just completed the B leg of a Corrective Flat.
The overall targets for the bottom of the correction are not hugely different for either scenario and overlap in some price ranges.
Grey Wave 5 : 8k - 9.5k
Blue Corrective Flat : 7.5k - 9k
I have no conviction for either formation so will likely target a buy at a driven reversal where they overlap.
This will not go straight down and may reverse earlier. I will therefore look to buy in at various stages on the way down, managing through stop losses and taking profits on any minor retraces. The chart shows where I think these areas are likely to be.
There are some that think BTC will always go up and as long as one HODL one will make money. I hope that is the case but I prefer to be open minded to both scenarios. I am therefore mindful that a much larger ABC formation could be in play which would take BTC down for a 5 wave impulse to 6k and likely even further. Whilst I do not share his conviction, I recommend reviewing this post for an overview of what the Doomsday scenario could look like.
Managing risk through stop losses will be key. Also, I will not buy in with my full pot until either there is a very clear 5 wave impulse up and/or 12k is breached. The risk to the downside is so great that I am quite content to pay some 'insurance money' through limited portfolio erosion to protect 50%+ losses on downside whilst allowing me to participate in the 100%+ impulses on the up side.
1 ) Completed a Leading Diagonal in the 1st wave of a new 5 wave impulse
The Fib would be from 11700 to 9300. A retrace of 0.382 - 0.618 would see the correction finished between 10,200 and 10,800.
2) Completed an Ending Diagonal of the 5 waves up from 6000
The Fib would be from 11700 to 6000. A retrace of 0.382 - 0.618 would see the correction finished between 8000 and 9500.
3) Completed an Ending Diagonal within the C wave of the X from wave 5
Going down for the Y leg. The Fib would be from 11749 to 6000. A retrace of 0.382 - 0.618 would see the correction finished between 8300 and 9600. Or if Y is the same length as W, down to 9200
4) Doomsday scenario
The impulse up from 6000 was just a corrective ABC on a change in trend, with a new 5 wave impulse down to now start. This could easily take the BTC -3.53% well past the 6k low.
1) Test and break the 1HR EMA 50
2) A Higher low on the 1HR and probably the 4HR TM
Even with these signals I would be reluctant to buy in at this stage. I'm considering going short on the test of the 1HR 50EMA.
1 min TM. Potentially forming a triangle for B before going up for the C to the 0.312 fib at 11160. This will also meet the blue resistance and 1HR 50EMA. Subject to seeing RSI divergence / over bought I will look to short. Target 10,200. Stop 11330. R5:1
The first was triggered by a rebound off the 4HR 50EMA. We have just gone through that and are retracing slightly. This may hold and go up to the 1HR 50EMA. I'm not buying here though as I think it's high risk.
RSI is now oversold on 1HR (20) but has a little way to go on the 4HR (35).
The next opportunity to go long is around 10.2k. I do not expect this to hold medium term but buying in now may allow for some extra profits and could allow an opportunity to hold if it does fully recover from there. 10.2k is meaningful because:
1) The current diagonal trend down ends on this spot
2) 0.618 fib of the wave v
3) Support at Wave (2) of Wave v plus 5 other areas of support/resistance in this i-v wave structure
I would need to see signs of reversal to enter, so this is not an automated trade.
Exit the position at the retrace to the 1HR 50EMA. Stop would be at 10100. Risk 4:1.
Within wave 5:
Wave 2 retrace 0.786
Wave 3 1.618 ext of 1 : 10409
Wave 4 retrace 0.618
wave 5 1:1 of 1 = 10404
1) Enter a new 5 wave impulse up (unlikely but not impossible)
2) Trade side ways with various ABC XYZ combinations
3) Up with an X which then goes into another large ABC correction which may have another one or two large 5 wave impulses in it
This is why trading corrections is so difficult.
I think there is more work to do going down. I expect the next highlight will be a test and bounce off of the 1HR 50 EMA.
I'm holding on to my hard earned dollars for now....
Wave 3 was just short of a 1.618 on wave 1. The 5th of 3 being truncated. Now down for the 5th, wave 1 of 5th completed. 1:1 Extension of 1 puts 5th at 10.3k.
p.s. note because of that monster order that went in on the 3rd or wave 5, it ended up with a truncated 5th. The start of this new wave is therefore not the bottom but 10435
I think we hadnt finished the 5 waves, that first set was the third with a relatively long sideways contraction.
What I have labelled as 5 here is exactly a 1 extension of wave 1 added to wave 3.
This could be the first leg of 5 or may be done. I need some time to digest....