Symmetrical triangle on BTC: A Bullish View
It is clear that Bitcoin has been consolidating in a symmetrical triangle over the past week. What isn’t so clear is which direction it is going to break out into.
Looking at the chart, if this Elliott wave count is correct, then a bullish breakout is the most likely scenario given the fact that the preceding trend is also bullish.
On the chart the entire triangle with the wave count is in blue. The thin black lines represent the 1-2-3 sub waves that compose each leg.
If this follows through, we should expect price to find local resistance at the confluence of R1 and R2 and then a small drop once more to the bottom of this triangle to point E.
This area will be critical to watch, a break below this triangle with heavy volume around Point E will invalidate the entire pattern.
However if price bounces from Point E and stays above, this bullish scenario becomes much more likely and in that case we should expect a huge jump in price with heavy buying volume.
In that scenario, the jump should be big enough to break 9.7k, but since it is a heavy resistance area we will have to watch that carefully.
Key
R1 = Resistance trend line formed from Dec 2017 high (19.7k) through recent April 2018 highs
R2 = Support-turned-resistance trend line formed from Sept 2017 low (2.8k) through Feb 2018 low (6k) and beyond
Looking at the chart, if this Elliott wave count is correct, then a bullish breakout is the most likely scenario given the fact that the preceding trend is also bullish.
On the chart the entire triangle with the wave count is in blue. The thin black lines represent the 1-2-3 sub waves that compose each leg.
If this follows through, we should expect price to find local resistance at the confluence of R1 and R2 and then a small drop once more to the bottom of this triangle to point E.
This area will be critical to watch, a break below this triangle with heavy volume around Point E will invalidate the entire pattern.
However if price bounces from Point E and stays above, this bullish scenario becomes much more likely and in that case we should expect a huge jump in price with heavy buying volume.
In that scenario, the jump should be big enough to break 9.7k, but since it is a heavy resistance area we will have to watch that carefully.
Key
R1 = Resistance trend line formed from Dec 2017 high (19.7k) through recent April 2018 highs
R2 = Support-turned-resistance trend line formed from Sept 2017 low (2.8k) through Feb 2018 low (6k) and beyond
Comment:
Here's another case for the bulls:
This entire consolidation pattern mirrors the accumulation phase seen at the beginning of April around the 6.5k range. I'm not saying it will play out the same exact way, and if the pattern above is valid then I still expect one more drop down to 9k-9.1k. But it could help strengthen the theory that this is a second phase of accumulation going on this past week.
Order cancelled:
Price has broken out of the wedge, so this pattern is invalidated. If momentum keeps up, looks like we could be repeating the fractal I posted above in the last update. Looks to be following it very closely so far, if so we should expect a big jump in price soon
If that wick up to the top last night was legitimate, then we should simply redraw Point D to that spot and probably want to move Point E slightly over to the left as well. I'll provided that updated chart as soon as I get confirmation on this pattern.