BTC is on the move. What's next?
Facts:
1. BTC operated within a 30-40K channel for about 2 months It's still in that channel.
2. BTC experienced a significant price move from the bottom of the channel to the top of the channel. It was a strong, classic 5 wave impulse.
3. BTC experienced above average volume relative to recent dwindling volume, but it wasn't overwhelming.
4. The start of the impulse coincided with a significant positive news event and was reinforced by subsequent Amazon payment rumors.
Hyptothesis: The latest impulse completed the corrective leg 4 of the bull run, and started an impulse leg 5 to a new ATH.
The answer is not confirmed because the corrective wave structure (flat trading channel) has not been invalidated. I took 2 large trades at 30 and 32K. I would like to add to those trades on a breakout of the channel, but also need to consider selling them for profit. The decision is significant because the potential new ATH could very large, but a retracement below support will almost surely mean a complete breakdown below 30K. The market didn't take very long to retrace to 30K after it failed at this level around Jun 15th.
I took my last large trade at 40.1k based on hourly price action after it held 40k for several hours, and the strong 5 wave V-impulse from the bottom. In retrospect, this wasn't a great setup, and I should have waited for it to take out the Jun 15th high - let's just call it FOMO.
Elliot Wave theory is a really nice tool. As I watched the impulse from the bottom develop I saw a clear 5 wave impulse pattern. Then we saw a nice 3 wave correction shown in the chart. The A leg came down to the healthy .5 fib, the B leg was strong, and the C leg I anticipated landing on the .618 fib. It landed much higher. The ABC corrective leg was more bullish than I anticipated.
The best case scenario would have been another 5 wave set of impulses that takes out the June 15th high on the first leg. Instead, I'm seeing flat waves. Is this good or bad? Its good because its drawing out weak hands, and consolidating at 39-40K which should make the next upward impulse stronger. It's bad if it is big money distributing like they did during the June 15th pulse that ended up with short term panic sellers and no support at 40K.
There are still a lot of similarities between now and Jun 15th. However, I see enough differences to continue holding my 40.1k position despite still not taking out the Jun 15 high.
1. Daily RSI is much stronger, and made a clear break of a significant downward RSI trend
2. 8 green candle days is rare for BTC history. How would a weakening market support this?
3. The Jun 15 pulse only lasted 40 hrs before it started retracing and never recovered.
4. The current impulse has sustained for 68 hrs and withstood a 10% retracement from its initial leg 5 high.
5. The daily ema ribbon was never really affected during the Jun 15 pulse. The current daily ema ribbon is mid way through a bullish cross - a bullish cross would be extremely bullish imo.
6. The length of the overall market correction is almost 6 weeks past Jun 15th. More weak hands were shaken out and the market demonstrated a more mature market bottom. Price fluctuation and volume dried up at 29K and strong support below those levels was demonstrated.
Facts:
1. BTC operated within a 30-40K channel for about 2 months It's still in that channel.
2. BTC experienced a significant price move from the bottom of the channel to the top of the channel. It was a strong, classic 5 wave impulse.
3. BTC experienced above average volume relative to recent dwindling volume, but it wasn't overwhelming.
4. The start of the impulse coincided with a significant positive news event and was reinforced by subsequent Amazon payment rumors.
Hyptothesis: The latest impulse completed the corrective leg 4 of the bull run, and started an impulse leg 5 to a new ATH.
The answer is not confirmed because the corrective wave structure (flat trading channel) has not been invalidated. I took 2 large trades at 30 and 32K. I would like to add to those trades on a breakout of the channel, but also need to consider selling them for profit. The decision is significant because the potential new ATH could very large, but a retracement below support will almost surely mean a complete breakdown below 30K. The market didn't take very long to retrace to 30K after it failed at this level around Jun 15th.
I took my last large trade at 40.1k based on hourly price action after it held 40k for several hours, and the strong 5 wave V-impulse from the bottom. In retrospect, this wasn't a great setup, and I should have waited for it to take out the Jun 15th high - let's just call it FOMO.
Elliot Wave theory is a really nice tool. As I watched the impulse from the bottom develop I saw a clear 5 wave impulse pattern. Then we saw a nice 3 wave correction shown in the chart. The A leg came down to the healthy .5 fib, the B leg was strong, and the C leg I anticipated landing on the .618 fib. It landed much higher. The ABC corrective leg was more bullish than I anticipated.
The best case scenario would have been another 5 wave set of impulses that takes out the June 15th high on the first leg. Instead, I'm seeing flat waves. Is this good or bad? Its good because its drawing out weak hands, and consolidating at 39-40K which should make the next upward impulse stronger. It's bad if it is big money distributing like they did during the June 15th pulse that ended up with short term panic sellers and no support at 40K.
There are still a lot of similarities between now and Jun 15th. However, I see enough differences to continue holding my 40.1k position despite still not taking out the Jun 15 high.
1. Daily RSI is much stronger, and made a clear break of a significant downward RSI trend
2. 8 green candle days is rare for BTC history. How would a weakening market support this?
3. The Jun 15 pulse only lasted 40 hrs before it started retracing and never recovered.
4. The current impulse has sustained for 68 hrs and withstood a 10% retracement from its initial leg 5 high.
5. The daily ema ribbon was never really affected during the Jun 15 pulse. The current daily ema ribbon is mid way through a bullish cross - a bullish cross would be extremely bullish imo.
6. The length of the overall market correction is almost 6 weeks past Jun 15th. More weak hands were shaken out and the market demonstrated a more mature market bottom. Price fluctuation and volume dried up at 29K and strong support below those levels was demonstrated.