Is BTC forming an Ending Diagonal?
Whether it marks a local top or the end of a 1-year-long uptrend, there's a growing sentiment that Bitcoin is due for a reversal soon.
I've attempted to use channels, harmonic patterns, and Elliott Wave theory in this analysis.
Just to let you know, I haven't ruled out the possibility of BTC setting new lows, which means that this rise could be a corrective wave from an Elliott Wave perspective. My premise is that we're completing the final 5th wave of, perhaps, a C wave, with the tail end forming a diagonal pattern.
If the diagonal completes without truncating, I expect it to form the harmonic pattern known as the Sea Pony, which would set targets around 47k to 49.6k (I see 47.6-48k). A weaker outcome might result in the Black Swan pattern, potentially capping the ceiling around 45.6k.
Additionally, there's a scenario where the E wave truncates without fully extending, drawing attention to the yellow channel. There's a green box between 37.6k and 35.8k, a potential rebound area even if the chart is in a bullish correction scenario. If a decline starts soon, we might see the movement touch either the bottom of the yellow channel or the green box, likely both.
It's still unclear whether the ascending channel will ultimately act as support, as it seems to be a resistance. The ascending channels will also be useful for measuring the price range if there's a clear break.
Special thanks to @Hewhomustnotbenamed, who is the author of the indicators I used here to illustrate the harmonic patterns.
I've attempted to use channels, harmonic patterns, and Elliott Wave theory in this analysis.
Just to let you know, I haven't ruled out the possibility of BTC setting new lows, which means that this rise could be a corrective wave from an Elliott Wave perspective. My premise is that we're completing the final 5th wave of, perhaps, a C wave, with the tail end forming a diagonal pattern.
If the diagonal completes without truncating, I expect it to form the harmonic pattern known as the Sea Pony, which would set targets around 47k to 49.6k (I see 47.6-48k). A weaker outcome might result in the Black Swan pattern, potentially capping the ceiling around 45.6k.
Additionally, there's a scenario where the E wave truncates without fully extending, drawing attention to the yellow channel. There's a green box between 37.6k and 35.8k, a potential rebound area even if the chart is in a bullish correction scenario. If a decline starts soon, we might see the movement touch either the bottom of the yellow channel or the green box, likely both.
It's still unclear whether the ascending channel will ultimately act as support, as it seems to be a resistance. The ascending channels will also be useful for measuring the price range if there's a clear break.
Special thanks to @Hewhomustnotbenamed, who is the author of the indicators I used here to illustrate the harmonic patterns.
