BTC has now broken and closed above the long term , although there is an alternative that could be valid which has not been broken yet. I am therefore moving from to slightly . Why am I not completely and calling for my moon scenario just yet?
1) Whilst BTC has broken the it is yet to take out any other key resistance levels which in the short term are 8.5k and 9.1k. In particular, breaking and closing above 9.1k would be a significant signal.
2) Whilst BTC does not have to replicate 2014 price action it can be useful to compare against it. If it were following a similar path to 2014, I see three potential scenarios:
Scenario 1: Short term bear then bull to 11k
Refused at , retest 6.5-6.8k to then break through and impulse up to 11k
Scenario 2: Bull to 11k
BTC has broken through the and will continue up impulsively to 11k
Scenario 3: Bear to 3-4k
BTC has not broken through the alternative (going through the second 11k wave) and will move back down to complete the 5th and final impulse of the C wave to 3-4k.
My instincts say we are most likely following something similar to Scenario 3. However, in the short term I will trade a scenario which takes BTC to 11k and potentially on to the moon. Invalidation of this view would be if BTC moves back into and closes below the .
In the immediate short term I added a small position long with a target of 8.4k. If BTC tests the and moves up from it I will look to add to my long position. If it breaks and closes below it, I will close my position. A drop below 7.2k will move me back to my view.
It looks like we are now in the Minor 3rd wave of the Primary 3rd wave up from the bottom, potentially moving into the Minor 4th retrace before a Minor 5th push up to the resistance at 9.3k-9.5k to complete the Primary 3rd wave. This would coincided with a 2.618 extension of the Primary 1st wave. My target for the Primary 5th is circa 10.6k, which would be a 1.272 extension to end this Primary wave structure.
I have maintained my long entry at 8.1k. I plan to re-enforce this at the next significant pull back. This may not come for a while but what I would be looking for now is a retrace to 8.6k and 8.45k to enter a additional 1/3 and 2/3 of a position respectively. We could of course go straight up from here and in that case I will continue to wait for a pull back before entering a new trade. My stop is now at my entry price.
- I count 5 Minor waves within the Primary 3rd wave and think the 3rd is therefore complete.
- The last Minor 4th retraced bang on 0.382 to 8616, giving me confidence in the count.
- The 5th Minor has now done a 1:1 extension of the 1st Minor wave.
- The Primary 3rd has been exactly a 2.618 extension of the Primary 1st.
- To round things off, BTC has reached the top of the channel.
This could go on further but I just think the weight of probability favours a pull back and I'm content to miss the boat if it doesn't happen. I'm going to maintain my current long so I've got skin in the game.
The first level of pullback is likely to be the 0.786 (8777) of this last Minor 5th. BTC may also post a double low at 0.236 of the 3rd wave (8640). I'll look to buy in both of these areas. The area I will be looking for a large position, if BTC gets there, is the 0.382 retrace which will also hit the bottom of the channel and the top of the alternative log trendline at around 8250.
To increase my long position, what I am looking for now is a ABC with an extended 1.618 C on A to reach out to 8,600 - 8,500. This would overlap with a 0.328 retrace of this 3rd Primary Wave and the 0.382 retrace of the wave from 11,700 to the recent 6,500 low. Ideally this will take a week or so to retrace so that BTC touches the bottom of the channel, but I think this is unlikely. It may also produce a 1:1 A:C, with resistance turned support at 9,000.
I'll therefore look to enter 30% of a position at 9,000 and the remainder 70% at 8,600. The stop will depend on how soon we reach out to those areas. Target would be 11,000 as this stage.
Minor wave A may have completed, entering wave B now. If this gets to around 9.6k (0.618 retrace) a 1:1 A:C would see BTC falling to 8.5k before starting its next Primary Wave 3. This would conincide with the 0.382 retrace of the Primary Wave 1 and support found form Minor Wave 4 with that Primary Wave 1.
As I wrote in my idea update, the operators should take the price a bit higher, at least to 9.8K before allowing a pullback. 9.8K will totally neutralize the med term bearish sentiment. Then a pullback will be supported by the currently broken resistance around 9.2k, to re-confirm that the bear market is over for now. I draw a pitchfork which seem to be working really good. The green channel could provide support as well.