I was able to short on the way down to 7.3k. From 7.3k I had anticipated the pull back to 9-9.5k but unfortunately missed my short entry because I expected it to take longer and test (touch) the linear long term diagonal (purple) formed from the 20k high. I even entered some short term buys anticipating an uptick but exited out a nil profit on those trades. I have since been waiting patiently to get my short entry. In this time I have been reviewing the 2014 action and the key price action points for this drop since Dec. It seems to me that with the exception of one point, BTC is respecting a the long term diagonal trend on a log basis. I had been looking at the log line, but using the 5 March 11.7k peak with this. The chart below shows how it has been respecting an different (touching and rejecting it 5 times).
Looking at the 2014 correction, it ended up breaking the trendline after a prolonged 3 weeks of sideways trading.
It would not be unreasonable to expect the same to need to happen this time, which reinforces my view that another drive down is required. However, it could break through this and head up and therefore placing the stop on any short trade will be important.
My conviction is that BTC is in the Super 5th wave down from the 11.7k test of the trendline (purple) and has completed wave i and wave ii and is now in wave iii with a target of around $3k. The current pull back is the retrace from the minor wave 1 within the larger wave iii.
I am looking for an ABC retrace formation to enter a short trade and would like to see this test the log diagonal . This would see it reaching out to around 7.4-7.86, pulling back slightly and then driving up to the (around 7.8-8.2k depending on timing). I'll manually manage the stop and will probably have it tight because if the is broken my plan is invalidated and we could see a sudden drive up. I would then potentially look to reenter a short at the 9k area or let this break and start to think about going long.
Entry: To be confirmed based on ABC , but approximately 7.8-8.2k
Stop: Tight, manually managed
Entry set up
Bull scenario from 1 month ago
Potential different bull scenario:
p.s. still on vacation so less frequent updates for a few more days.
For shorting, what I ideally want to see is a strong impulse up over the next 2-5 days to challenge that trend line at around 7800.
Entry : 6907
Stop : Just north of 7000
Target: Initially 6700 (bottom of triangle)
Bear scenario we have been following:
Bull scenario we have been keeping an eye on:
I think up and down are 50-50 at this point, that's why we are stuck here.