This post just iterates the fundamentals chart formations, support and resistance and Fibonacci retracements. When it comes to rising wedges the wedge often fully performs after a retest of the previous wedge support. As rising wedges are bearish in nature they often do not require a rejection to perform, but any rejection does set up a potential ABC correction that you can do a fib extension on. These fundamentals, in my estimation, are more important than most indicators like moving averages or MACD or RSI.
Tactical sellers will be watching for BTC to show signs of weakness at the previous wedge support. Tactical buyers will be looking to buy a dip determined by the grey trendline. The market hinges on support being found on that trendline: bear or bull.
ABC corrections often have the C wave as the longest corrective wave exceeding the 1.618 extension of wave A. With this last dump from the blue wedge we see support was found on the weekly time frame at the 2 level of the fib extension.
A prospective retracement of the orange rising wedge price action beneath the my grey battle line and the bulls would really need to buy that line, on the weekly time frame, for this bull market to continue.
Elliot Wave Rant There is this persistent myth that BTC has never traded within its all time high on a subsequent rally and this is because analysists refuse to consider the 2013 high and subsequent 80% drop and about 200 days to retake the all time high as a valid market cycle. For this reason many analysis refuse to consider that price can retrace below the 2017 high. I suggest they are in err and don't consider that the market cycle was a lot faster in 2013-14.
So far the chart above shows btc playing out similarly from swing high to swing low. We have a relatively longer lasting topping formation than the one before it that initially found support on the 0.236 level. The fact that this fib draw shows the same activity provides some validation that the draw is correct. Therefore, if the draw is correct we should be watching for buyers to step up on the weekly time frame around the 0.382 level at about 20.5k if my battle line fails as support on the weekly.
And that is only if the similarities still hold. After that the ultimate target is at 10k. That would set up the 1 and 2 leg of a higher time frame and is required by Elliot wave.
Rant Intensifies Bitcoin has to trade within previous all time high due to simple Elliot wave theory. Wave C has to terminate within wave 4. The chart below shows a 5 count and an ABC correction. This makes up a 1-2 Elliot wave on a higher time frame. Elliot waves are fractal, so every time we trade within a previous all time high we know we are in a ABC correction.
If the grey battle line holds then at some point we will set an all time high and then trade within it. Elliot wave requires it. If they grey line holds the next fib level we should be watching for a major stall is the 2.618 at around 386k
Rant Concludes I cannot guarantee that we are in a macro ABC correction that will trade within previous all time high. But I can assure you that the idea that bitcoin will and has to trade within all time high involves a fundamental understanding of Elliot wave theory, has happened before, and represented one of the best buying opportunities of all time because price never returned to those levels ever again. And you don't have to take my word for it, you can just look up the fundamentals of Elliot wave yourself.
Idea Conclusion This post is basically a series of if statements and probable outcomes. If price action finds resistance at previous wedge support a retrace to the grey battle line is realistic. If the grey battle line fails as support then a bear market is realistic. If a bear market is realistic Elliot wave theory predicts that trading within a previous all time high is not only realistic, it is required depending on where we are in the market cycle. On the bullish side if the grey battle line holds as support, or price gets above the orange wedge formation then the bull run is likely to continue. Upside target is 386k, downside target is 10k based on the charting above and most of it likely hinges on a retest of the grey battle line and the outcome thereof.
@This_Guhy, Thank you. I may not understand correctly, but from what I gather, if wave c has to terminate within wave 4, that would be between 41.9k-29k correct?
If that is true, then where does 20k and 10k come from?
This_Guhy
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@ImminentDebacle, One of problems with Elliot wave is their fractal nature and so it can be confusing in situations above where I have two different time scale cycles posted. Trying to cut through that, here is the monthly BTC chart with what I see are several ABC corrections on the log chart with the keltner channel. Twice before the ABC correction ended just below the monthly keltner around the 1 fib extension. It might take a couple of months to get there but so far that has been my long term bear market target.
@This_Guhy Can you clarify please, what do you mean by "Wave C has to terminate within wave 4"?
Expecting 10k as the ultimate target after breaking 20k support and restarting the count of wave 1 might break the time-scale balance, and it seems improbable.
However, as you said if BTC fails to find support on gray line and breaks down the 20k support, the current cycle's wave 4 count (july low starting B wave in ABC correction; C wave started 2 days ago) would still be valid until 14288 (0.5 fib). At that point, wave 4 would be invalidated since it enters the price territory of wave 1 (14288 top).
So, in that case we could still expect the 5th wave and bull market to continue.
This_Guhy
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@SKNMT, Please post a wave count for us to go over with different cycle levels.
Cryptotheque
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One man's rant is another man's treasure
AdrianZen
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I always open your analyses on the Phone first and then need to get a better look at them using a computer ;). This is top stuff.